NZD/USD pares recent losses at a 26-month low, up 0.80% around 0.6210 heading into Monday’s European session, as the US dollar retreats from a two-week top amid the US holiday.

In doing so, the Kiwi pair ignores bearish signals from the options market as sellers lick their wounds ahead of the key US data/events.

That said, the NZD/USD risk reversal (RR), the spread between the call options and the put options, dropped the most in three weeks the previous day, to -0.260, after the US ISM Manufacturing PMI propelled the recession woes. The daily RR was fierce enough to drown the weekly print back in favor of the bears.

Given the lack of major data/events and the US holiday, NZD/USD can consolidate the latest downside move ahead of the Federal Open Market Committee (FOMC) Minutes and the US Jobs report for June.

Also read: NZD/USD regains 0.6200 but bulls need validation from Fed Minutes, US NFP