NZD/USD: Bulls attack 0.7200 despite bank holiday in New Zealand
|- NZD/USD eyes to fill the week-start gap from 0.7102 to 0.7192.
- Risks stay firm amid expectations of US relief package, school re-open despite downbeat vaccine developments.
- US dollar fell on Friday amid mixed data but Wall Street and Treasury yields came out positive.
- Bank holiday in New Zealand, light calendar in Asia highlights risk news as catalysts.
NZD/USD picks up bids around 0.7190 following a bounce off 0.7183 during the initial Asian session on Monday. The kiwi pair was among the Antipodeans that benefited from the US dollar’s U-turn on Friday as well as a jump in the risk catalysts.
Cheering US dollar weakness, upbeat NZ fundamentals…
With the steady recovery in New Zealand (NZ) employment data, in contrast to the mixed US jobs report, during January, the Reserve Bank of New Zealand (RBNZ) has another reason to stay away from further rate cuts. Also helping the kiwi optimists were NZ recovery from the coronavirus (COVID-19) and the recent approval of vaccines at home.
Read: RBNZ to hold off from rate cuts for the forseeible future, how much is already baked into the cake?
On a broader scale, US President Joe Biden’s $1.9 stimulus is back to Congress for final approval after Democratic Party used Vice President’s vote to fast-track their proposal. However, Republican Party members aren’t yet ready to free-up their limits near $700 billion.
Read: US President Biden: women dropping out of workforce, closed schools are “national emergency” – CBS
Global vaccinations have a bumpy road with production and delivery delays challenging the mood. Also on the negative side is the latest news, shared by the Financial Times, which quotes a study suggesting the Oxford/AstraZeneca vaccines not effective against the South African variant.
Amid these plays, Wall Street benchmarks were strong on Friday and the US 10-year Treasury yields probed March 2020 peak. Further, the US dollar index (DXY) took a U-turn from the two-month high with the largest daily drop in 2021.
Given the off in New Zealand markets, due to Waitangi Day, NZD/USD traders need to check on risk catalysts like US stimulus, vaccine developments and geopolitical headlines for fresh direction. Though, the bulls are likely to keep the reins more or less.
Technical analysis
Unless breaking the one-month-old descending resistance line, currently around 0.7205, NZD/USD bulls shouldn’t ignore the risk of a 50-day SMA retest, at 0.7150 now.
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.