Forex Market: NZD/USD inches up at the start of the week, focus sets on Federal Reserve’s annual symposium on August 27th-28th

NZD/USD traded within a narrow range during early European session on Monday amid lack of relevant macro data, while market players now focus on the Federal Reserve’s annual symposium later in the week for guidance on monetary policy outlook.

The 44th annual Economic Policy Symposium, scheduled on August 27th-August 28th, will be a virtual event because of the pandemic, while its topic will be “Navigating the Decade Ahead: Implications for Monetary Policy.” Usually, the symposium is conducted at the hunting and fishing resort of Jackson Hole, Wyoming.

The US Dollar has been under pressure over the past several months due to Fed’s quantitative easing measures in support of economic activity and many analysts believe the greenback’s decline may continue in the longer term as the US central bank commits to aggressive easing for an extended period of time.

Meanwhile, the latest data by the US Commodity Futures Trading Commission showed speculators’ net short positions in the US Dollar had decreased from their highest level in more than nine years, implying a possible deceleration in the greenback’s retreat.

As of 6:57 GMT on Monday NZD/USD was inching up 0.04% to trade at 0.6538, while moving within a daily range of 0.6525-0.6549. The major pair advanced 2.70% in July, which marked its fourth straight month of gains. NZD/USD has retreated 1.32% so far in August.

In terms of economic calendar, no relevant reports are scheduled to be released on Monday.

Bond Yield Spread

The spread between 1-year New Zealand and 1-year US bond yields, which reflects the flow of funds in a short term, equaled 9.7 basis points (0.097%) as of 6:15 GMT on Monday, down from 9.9 basis points on August 21st.

Daily Pivot Levels (traditional method of calculation)

Central Pivot – 0.6534
R1 – 0.6551
R2 – 0.6566
R3 – 0.6583
R4 – 0.6600

S1 – 0.6518
S2 – 0.6501
S3 – 0.6486
S4 – 0.6470

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