NZD/USD awaits fresh catalysts around three-month top beyond 0.6350
|- NZD/USD bulls catch a breather after probing March month’s high with 0.6374 figures.
- Risk-tone sentiment dwindles amid mixed messages from the US.
- Aussie data, risk catalysts will be the key amid no major updates from New Zealand.
NZD/USD retraces from 0.6374, highest since March, to 0.6365 by the press time of early Asian session on Wednesday. While the kiwi pair’s earlier run-up could be attributed to the broad risk-on sentiment and the US dollar weakness, the recent pullback might have taken clues from the US to pause near the multi-day top.
NBC cites the fears of the coronavirus (COVID-19) second wave in the US whereas Axios signals that US President Donald Trump backs off from the idea of using Federal forces to tame the riots after suggesting the same the previous day.
Also confusing the traders could be the cautious optimism about the virus vaccine by Anthony Fauci, Director of the US National Institute of Allergy and Infectious Diseases (NIAID).
On Tuesday, the US dollar Index (DXY) refreshed the 12-week low amid fears of widespread protests against the alleged killing of Minnesota’s George Floyd. Also weighing the greenback down was the market’s risk-on mood amid hopes of economic restart in Europe and also following increased hopes of the further stimulus from the ECB.
Having said that, the S&P 500 Futures gain 0.10% to 3,080 by the press time. In doing so, the risk barometer reverses the initial losses of the same magnitude.
Given the lack of major data/events from New Zealand, kiwi pair traders will rely on a slew of major economics from Australia. Among them, Aussie's first quarter (Q1) GDP, expected -0.3% QoQ versus +0.5% prior, will be the key to watch.
Technical analysis
Despite crossing 200-day SMA on a daily closing basis, the quote is yet to surpass the early-February lows near 0.6380, which in turn may trigger the pair’s pullback, amid overbought RSI, towards revisiting the key SMA near 0.6315.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.