NZD/USD bulls catch a breath near six-week top above 0.6100, China PMI in focus
|- NZD/USD seesaws around multi-day high after marking five-day north-run.
- Broad US dollar weakness, risk-on favor antipodeans.
- New Zealand’s ANZ Business Confidence, China PMI become immediate catalysts, virus updates are the key.
Having refreshed the six-week high to 0.6140, NZD/USD steps back to 0.6132 ahead of the Tokyo open during Thursday’s Asian session. The Kiwi pair previously cheered broad US dollar weakness and risk-on sentiment while the latest pause could be a cautious play ahead of the key data.
Not only the US Federal Reserve’s (Fed) dovish halt in monetary policy easing and downbeat statements from the policymakers but the sharpest drop in the Q1 US GDP also extended the greenback weakness the previous day.
While matching wide anticipations of no monetary policy change, the Fed conveyed fears that the coronavirus (COVID-19) will take a toll on the world’s largest economy. Further, the policymakers, including Chairman Jerome Powell, struck cautious statements while showing readiness to do “whatever it takes”.
Also weighing on the US dollar could be the market’s risk-on sentiment due to the positive updates from Gilead. The pharmacological company announced the upbeat results of its experimental drug, Remdesivir, which has garnered major attention as a probable cure to the pandemic.
Following the news, US President Donald Trump pushed the FDA (Food and Drug Administration), as per the CNBC, to fasten the process to approve the drug to be used as a vaccine. It’s worth mentioning that the Republican leader continues to push for the economic restart during his latest comments.
Amid all these, US stock futures struggle to find direction after Wall Street’s positive performance the previous day.
Kiwi traders may now keep eyes on the economic calendar that offers April month New Zealand (NZ) ANZ Business Confidence and China’s official PMI data at 01:00 GMT. While the ANZ’s sentiment gauge is expected to drop further below -63.5 to -69.5, China’s Manufacturing PMI could also weaken from 52 previous to 51. If the scheduled data come out as disappointing, the pair sellers can sneak in to benefit near the multi-day high.
Technical analysis
The pair’s successful break above 50-day SMA enables it to challenge the yearly resistance line, currently near 0.6210, unless it stays above 0.6060.
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