NZD/USD rises above 0.5900, bears still in command

• NZD/USD rose back above 0.5900, displaying nearly 0.20% gains.
• The USD DXY and US yields are retreating after sharply rising on Friday following Powell’s speech.
• Eyes on labour market and economic activity figures from the US.

On Monday, the NZD/USD gained traction and rose above 0.5900. No relevant data was released for the US and New Zealand and the upward momentum can be explained by the USD slightly retreating against its rivals, consolidating Thursday and Friday’s gains.
 
Markets are still assessing Jerome Powell’s words on Friday. He didn’t commit to another hike and addressed that the monetary policy is still data-dependant and the data justifies another hike. In addition, he stated that the economy hasn’t cooled down as expected and that they will retain rates at restrictive levels until inflation shows signs of deceleration.

All eyes are now on the US economic calendar releases this week, which include mid and high-tier labour market figures, including JOLTs Job Openings figures from July and ADP Employment Change and Nonfarm Payrolls from August. In addition, Gross Domestic Product (GDP), ISM PMI and Core Personal Consumption Expenditures (PCE) will also be closely watched for investors to model their expectations for the next Fed meetings.

In the meantime, according to the CME FedWatch tool, the odds of a hike in September are still low, but the probabilities increased nearly 50% for the November meeting.

 NZD/USD Levels to watch 

 Based on the daily chart, it is evident that NZD/USD leans toward a bearish outlook in the short term. The Relative Strength Index (RSI) remains below its midline, deep in negative territory, showcasing a neutral slope near the oversold threshold. Similarly, the Moving Average Convergence Divergence (MACD) exhibits red bars, emphasizing the strengthening bearish momentum for NZD/USD. Also, the pair is below the 20,100 and 200-day Simple Moving Averages (SMAs), indicating a challenging position for the buyers in the bigger picture as the bears remain in command.

 Support levels: 0.5900, 0.5870, 0.5850.

 Resistance levels: 0.5940, 0.5950, 0.5980.

 NZD/USD Daily Chart