NZD/USD extends bullish momentum, reclaims 0.7200 handle

Extending its bullish momentum for fifth consecutive trading session, the NZD/USD pair has now managed to surpass 0.7200 handle to currently trade at session high level of 0.7215.

Despite of the Brexit led sharp fall, the pair has repeatedly managed to bounce-off sub-0.7000 psychological mark and has been a key beneficiary in the post-Brexit global risk-on rally. A fresh bout of buying interest on Monday assisted the pair to reclaim 0.7200 handle and continue with its strong bullish momentum.

A broadly weaker US Dollar, led by global risk-on sentiment, is extending support to riskier assets - like commodities, which is seen boosting demand for commodity-linked currencies - like the Kiwi. 

Going forward, the fortnightly release of the GDT Price Index would be key in determining the pair's near-term trajectory, while markets remains focused on this week's FOMC meeting minutes on Wednesday ahead of the most keenly watched US non-farm payrolls data on Friday. 

Technical outlook

A team at Dukascopy Bank SA notes, "Despite the recent (June 23) test of the upper bound of the bullish channel that originated in mid-2015, NZD/USD managed to find solid support at 0.6970. From here, the currency pair formed an ascending channel, which is set to develop further, considering a plethora of bullish technical indicators. The positive bias is further reinforced by the positioning among the SWFX traders, 74% of whom are currently holding shorts. Accordingly, we expect the Kiwi to keep appreciating, until the price reaches the major resistance line at 0.7280, and then it will most likely breach the lower bound of the short-term channel. In the meantime, the downside is presently defended by this trend-line at 0.7150."