NZD/USD attempting to regain 0.6000

• NZD/USD supported at 0.5975 consolidates around 0.6000.
• The New Zealand dollar fails to take advantage of a softer USD.
• The kiwi is likely to remain weighed by low commodity prices.

New Zealand’s dollar retreat from 0.6040 high on Thursday was contained at 0.5975 on early Friday’s trading, and the pair has managed to trim losses, returning to 0.6010, before ticking down below 0.6000. The positive market sentiment and a somewhat softer dollar have allowed the kiwi to consolidate within a narrow range, around 0.6000 over the last session.

NZD/USD consolidates as the US dollar loses steam

The New Zealand dollar has failed to take advantage of the broad-based dollar pullback, with the Dollar Index putting an end to a four-day rally, and has moved without a clear direction today. The downbeat US Durable Good Orders, which have plunged by 14.4%, the largest decline in six years, have passed practically unnoticed.   

Looking from a wider perspective, the pair remains trading within a horizontal channel between 0.5915 and 0.6100. The kiwi is supported by New Zealand’s success on containing the COVID-19 which has situated the country in a good position to kick off the normalization phase. On the negative side, however, investors' concerns about a slow recovery, that would keep commodity prices low for some time, are weighing on the commodity-related NZD.

NZD/USD Technical levels

On a technical perspective, the NZD/USD trading above support levels at 0.5910/20 (April 16, 22 lows) and below here, 0.5840 (April 3 low) and 0.5780 (March 26 low). On the upside, immediate resistance lies at 0.6035 (Aril 23 high) and beyond here, 0.6060 (April 10, 13 lows) and then 0.6130 (April 14 high).

Key levels to watch