NZD/USD surrenders a major part of its early gains to 0.60 mark
- NZD/USD retreats around 40 pips from session tops and drops back closer to daily lows.
- Bullish traders seemed rather unimpressed by a strong rally in the US equity markets.
- A goodish pickup in the US bond yields helped limit the intraday USD corrective slide.
The NZD/USD pair failed to capitalize on its early uptick to the key 0.60 psychological mark and has now retreated to the lower end of its daily trading range.
The pair managed to regain some positive traction on Wednesday and the uptick was sponsored by a modest US dollar pullback. Investors cheered the passage of another $484 billion economic support bill by the US Senate and the same was evident from a strong positive move in the equity markets.
The risk-on mood undermined the greenback's safe-haven demand and provided a modest lift to perceived riskier currencies, including the kiwi. However, a goodish pickup in the US Treasury bond yields helped limit the intraday USD slide and kept a lid on any further strong gains for the major.
Meanwhile, the pair's initial uptick lacked any strong bullish conviction, instead fizzled out rather quickly as investors remain concerns about the economic fallout from the coronavirus pandemic and continued lending some support to the USD's status as the global reserve currency.
The pair has now retreated around 40 pips from daily tops and moved well within the striking distance of a near one-week-old trading range support, around the 0.5940-35 region. Failure to defend the mentioned support might prompt some technical selling and pave the way for additional near-term weakness.
Technical levels to watch