NZD/USD eases off monthly highs, sticks to gains above 0.70

• NZD/USD advanced to fresh monthly high at 0.7050 on Monday.
• Greenback remains in the red near 94.

The NZD/USD pair rose to its highest level since early May at 0.7050 in the first half of the day to become one of the best performing USD denominated pairs on Monday. Following this short-term rally, the pair has gone into a consolidation phase in the NA session and was last seen trading at 0.7030, adding 0.7% on the day.

The pair's upsurge seems to have been fueled by the greenback's weakness rather than a stronger NZD. After staying under a modest bearish pressure during the European trading hours, the US Dollar Index tumbled to a 10-day low at 93.63 to help the NZD/USD pair preserve its momentum. Later in the day, a strong ISM-NY Business Conditions index, which rose to 66.9 in May from 64.3 in April, allowed the index to retrace a portion of its daily losses. As of writing, the index losing 0.17% at 94.

Although there won't be any significant data releases from New Zealand, the Reserve Bank of Australia is going to announce its interest rate decision and publish its monetary policy statement. Any sharp reactions witnessed in the positively-correlated AUD/USD pair could impact the pair's price action.

Technical outlook

With today's rise, the RSI indicator on the daily graph turned north above the 50 mark, suggesting a build-up in the bullish momentum. 0.7060 (50-DMA) aligns as the first technical resistance ahead of the critical 0.7110 (200-DMA) and 0.7185 (100-DMA). On the downside, short-term supports could be seen at 0.7000 (psychological level), 0.6960 (Jun. 1 low) and 0.6880 (May 29 low).