U.S. Dollar Was unable to Retain its Earlier Gains

The U.S. Dollar is one of the most recognizable currencies in the world and this fact once more highlights its importance. It is worth noting that, the greenback has given up its earlier advance, with EUR/USD moving to 1.2144 as well as nearing a test of daily resistance closer to 1.21 at the moment.

At the moment, commodity currencies have also pared their drop a few hours ago with AUD/USD turning back up to 0.7887 from 0.7860 earlier and NDZ/USD moving back above 0.7300 after a brief dip below the figure level to start the session.

Moreover, USD/JPY also fell to 105.53 from a high of 105.85 earlier.

New Zealand dollar and main findings

It is worth mentioning that, the New Zealand Dollar remains the most overbought currency. Interestingly, with both fast money and real money accounts boosting their net longs. Nevertheless, despite this, NZD has been underperforming against the Australian Dollar in recent weeks.

People should keep in mind that, the main focus for New Zealand Dollar will be the RBNZ monetary policy. Interestingly, the central bank will most likely acknowledge the better than expected recovery in NZ’s economy. In Turn, with the central bank closer to their objectives relative to the RBA, AUD/NZD may struggle in the near term.

Interestingly, a reduced political risk premium and a successful vaccine rollout program helped Pound to become this year’s top performer in G10 FX so far. Importantly, net longs picked up and expectations are that speculators will grow even more bullish on the Pound.

As a reminder, last week saw GBP/USD top 1.40 for the first time in nearly 3 years. Moreover, there is little in the way of technical resistance until the 2018 double tap at 1.4350. The Pound is likely to remain a better performer against low yielders such as JPY, CHF, as well as EUR.