Trade-related uncertainty continues to call for caution among traders with a bullish bias.

At the start of the European session, the NZD/USD pair partially recovered its intraday losses. However, the quotes remain within the broader range of Friday's levels, which calls for caution among active market participants. The US dollar began the new week on a weaker note and continues to trade below the June highs amid mixed signals regarding the Federal Reserve's future rate-cutting policy.

Moreover, Federal Reserve Governor Christopher Waller expressed support last week for a possible rate cut as early as July. These factors, along with a positive risk sentiment in global markets, are weighing on the dollar while supporting the risk-sensitive New Zealand dollar.

Nevertheless, market participants believe that the US central bank may keep interest rates elevated for longer, due to signs that import tariffs introduced by the Trump administration are influencing inflation and pushing up consumer prices. Additionally, concerns about the possible negative consequences of President Donald Trump's unpredictable trade policy and ongoing trade disputes are prompting investors to remain cautious, limiting both significant USD downside and NZD/USD upside.

In this context, it would be prudent to wait for confirmation of further buying before preparing for a potential upward move in spot prices, especially given the lack of important US economic data today. Later this week, traders may find better trading opportunities from the release of preliminary PMI business activity indices scheduled for Thursday.

From a technical standpoint, as long as daily chart oscillators remain in negative territory, the pair may struggle to gain strength. The nearest resistance lies at 0.5975; a break above this level could allow the pair to reach the key 0.6000 level. On the other hand, primary support for NZD/USD is located at 0.5940. A move below this level could open the way for sellers to push prices down toward the monthly low and the round level of 0.5900.