NZD/USD leaves an unclosed gap, lacks directional decision in Asia trading

• NZD/USD undecided to start the week.
• Recent USD buying may be short-lived.

NZD/USD opened the week with a small gap downwards, and still hasn't been able to close it, currently trading into  0.7240 ahead of the Tokyo Monday market open.

The Kiwi put in a bottom on Thursday after dropping against the US Dollar earlier in the week; February is shaping up to be a pullback for the currency pair following December and January's decidedly one-sided action that saw the New Zealand currency lift 8.2% against the Greenback. The US Dollar short trade has lost some of its popularity recently, as equity and bond markets come to terms with the inevitability of higher interest rates in the face of global infaltion rearing its head for the first time in a decade. This week promises to be data-light for New Zealand, and traders can expect the pair to be governed by overall market volatility and risk sentiment as the broader markets battle it out between swings of buying and broad selloffs.

NZD/USD Technicals

An upside continuation in the pair will require hoisting itself over resistance at 0.7256 and 0.7310 just beyond, while continued selling will have to contend with swing support priced in at 0.7190; long-term, NZD/USD is still poised for healthy buying opportunities, with price having recently tested the 34 EMA at 0.7230, as the 200-day SMA provides support from 0.7148. Further adding credence to bullish powers, last Thursday's dip into the 0.7185 region also coincides with the 38.2 Fibo retracement level.