• NZD/USD bounced off a key support level following an impressive retail sales report.
  • EUR/GBP continues to edge higher on the ECB, forecasting a better EU economic outlook.
  • Cryptocurrencies remain under pressure amid a sell-off wave.

The NZD/USD bounced off a key support level early Monday morning, recouping some of the past week’s losses. The pair came into the new week after a 1.1% slide the past week. After the recent bounce back, the 0.7140 has emerged a key support level above which the pair remains well supported for further upside action. A breach of the support level could result in the pair plunging towards the 0.7000 level.

NZD/USD bounce back

Likewise, NZD/USD needs to rise and close above the 0.7198 level to have any chance of rising and finding support above the 0.7200 level.

NZD/USD chart

The bounce-back came as traders digested a better-than-expected retail sales report that once again affirmed ongoing economic recovery. Retail sales came in at 2.5% above 4.4% drop expected and -2.7% on Quarter over Quarter. The impressive data helped push the pair up.

The focus is on the monetary policy meeting by The Reserve Bank of New Zealand. A better-than-expected retail sales report could trigger monetary policy adjustments, curtailing further upside action.

Euro strengthens

The euro also holds firm against the British pound, helping affirm a bounce back from one-week lows. The EUR/GBP pair has since retaken the 0.8600 after coming under pressure in recent weeks.

The bounce-back came as traders reacted to the European Central Bank, forecasting a brighter outlook for the bloc. According to the ECB, the bloc’s economy should grow by 4.2% in 2021, up from an initial 3.7% growth forecast.

The EUR/GBP pair retaking the 0.8620 levels has opened the door for further spikes to the 0.86420, a key resistance level. A rally followed by a close above the resistance level should pave the way for the pair to make a run for the 0.8690 level.

EUR/GBP chart

With German economic recovery not far from the U.K.’s, the euro looks set to continue strengthening. The common currency should also benefit from other European nations easing lockdown restrictions as infection rates continue to slow.

Oil prices rose to five days high in the commodity markets after a recent sell-off to one-month lows. Brent Crude oil rose by more than 1% Monday morning to $67.16 a barrel as West Texas Intermediate oil rose 1.1% to $64.25 a barrel.

Oil prices chart

The rally in the oil markets came after it emerged that the U.S. and Iran are far off from reaching an agreement that could have resulted in more oil supply in the market. Goldman Sachs reiterating that the case for higher oil prices remains intact even with Iran exports also continues to offer support to higher oil prices.

U.S. stock future turned bullish early Monday morning after the S&P 500 posted its second consecutive weekly loss. The Dow Jones Industrial Average was up 156 points as the S&P 500 futures rose 0.48%. NASDAQ futures were up 0.49%.

NASDAQ 100 index

Last week the Dow posted its fourth negative week in the past five weeks as the S&P 500 registered two straight weeks of losses. On the other hand, the NASDAQ posted a rare 0.31% weekly loss snapping a four-week losing streak.

Cryptocurrency selloff

In the cryptocurrency market, a sell-off wave showed no signs of easing, with Bitcoin, Ethereum, and Dogecoin all posting losses at the start of the week. Last week alone, more than $1 trillion was wiped from the combined crypto market price, with Bitcoin being the biggest casualty, shedding almost 50% of its value since hitting all-time highs.

After plummeting to the $33,600 levels, BTC/USD was trying to bounce back, retaking the $36,000 handle as of writing. However, the bearish momentum that started two weeks ago remains in place.

BTC/USD chart

ETH/USD was also trying to bounce back after a recent sell-off from all-time highs above $4,300 levels. The $2,000 handle has emerged as a key support level averting further slides.