NZD/USD sticks to gains near mid-0.6800s, weaker risk tone to cap gains ahead of US CPI
- NZD/USD attracted dip-buying on Thursday and turned positive for the second straight day.
- The uptick lacked bullish conviction amid renewed USD buying interest and jittery markets.
- Traders now eye US CPI report for a fresh impetus amid the Russia-Ukraine ceasefire talks.
The NZD/USD pair held on to its modest intraday gains through the first half of the European session and was last seen trading near the daily high, around mid-0.6800s.
Following an early dip to the 0.6810 region, the NZD/USD pair attracted fresh buying for the second straight day on Thursday and has now reversed its modest weekly losses. The uptick, however, lacked bullish conviction or strong follow-through buying amid the Russia-Ukraine jitters.
In the latest developments, reports indicated that Russian forces have dropped several bombs on the children`s hospital and taken over parts of Mariupol. Adding to this, the UK Armed Forces minister - James Stephen Heappey - warned of NATO intervention if Russia uses chemical weapons.
Separately, Kremlin said that if someone uses weapons against Russian forces in Ukraine, they will become targets. This, to a larger extent, overshadowed the latest optimism over the possibility of a diplomatic solution to end the war in Ukraine, which, in turn, kept investors on the edge.
A turnaround in the risk sentiment - as depicted by a sharp decline in the equity markets - drove some haven flows towards the US dollar and should act as a headwind for the perceived riskier kiwi. Investors also seemed reluctant ahead of Thursday's release of the US consumer inflation figures.
The US CPI report, due later during the early North American session, along with fresh developments surrounding the Russia-Ukraine saga, might influence the USD price dynamics. Apart from this, the broader market risk sentiment should produce a fresh trading impetus to the NZD/USD pair.
Technical levels to watch