• NZD/USD posts modest gains during the European session.
  • US Dollar Index stays relatively quiet above 90.00 on Monday.
  • Trading action is expected to remain subdued due to Memorial Day holiday in US.

The NZD/USD pair lost nearly 50 pips on Friday but managed to close the previous week in the positive territory supported by the Reserve Bank of New Zealand’s hawkish policy outlook. At the start of the new week, the pair is edging modestly higher and was last seen gaining 0.2% at 0.7260.

DXY goes into consolidation above 90.00

Earlier in the day, the data from China showed that the economic activity in the service sector expanded at a stronger pace than expected in May with the official Non-Manufacturing PMI improving to 55.2 from 54.9 in April. Additionally, the NBS Manufacturing PMI arrived largely in line with analysts’ estimate at 51.

The US stock and bond markets will be closed due to the Memorial Day holiday on Monday and the trading action is likely to remain subdued in the second half of the day. Meanwhile, the US Dollar Index (DXY) is fluctuating in a tight range above 90.00, where it closed on Friday.

There won’t be any high-tier data releases from New Zealand on Tuesday and investors will pay close attention to the ISM Manufacturing PMI data from the US.

Technical levels to watch for