NZDUSD is in the negative below 0.5900 despite the advent of USD purchasing

Following a slight bearish gap opening to the 0.5855-0.5850 region on Monday, the NZDUSD pair gets some buying, but struggles to profit on the move. Spot prices retreat a few pips from the day high and remain on the defensive below the 0.5900 level through the start of the European session, as the US Dollar gains moderate ground.

The USD regains some upward momentum on the first day of the new week and recovers a portion of Friday's decline following the release of the NFP. In fact, the monthly US employment report's mixed findings stoked rumors that the Federal Reserve could delay the pace of future rate hikes and weighed severely on the dollar. However, rising US Treasury bond yields and a weaker tone assist limit the dollar's losses and act as a headwind for the NZDUSD pair.

Concerns about headwinds arising from China's determination to retain its economically damaging zero-COVID policy have kept market confidence weak. This occurs in the midst of the protracted Russia-Ukraine conflict and contributes to mounting concerns about a deepening global economic crisis. Even from a technical standpoint, bullish traders should be wary of the advent of fresh selling ahead of the mid-0.5900s. Therefore, it is wise to wait for substantial follow-through purchasing before positioning for any meaningful NZDUSD pair rise.

The US is not scheduled to provide any market-moving economic data, leaving the USD at the mercy of US bond yields. Aside from this, traders will take cues from the broader market risk mood in order to capitalize on short-term chances surrounding the risk-sensitive New Zealand dollar. However, the mixed underlying backdrop may drive short-term traders to remain on the sidelines until Thursday's release of the most recent US consumer inflation numbers.