NZD/USD: Bulls keep eyes on 0.3700 as trade sentiment stays positive
|- NZD/USD shrugs off downbeat New Zealand data while attacking the upper end of 0.6666-88 trading range.
- New Zealand Electronic Card Retail Sales dropped 7.9% MoM in August.
- Risk-tone stays positive during the pre-ECB period, US dollar weakness gains market attention.
- US Initial and Continuous Jobless Claims are also important, risk factors to remain as the key.
NZD/USD remains mostly unchanged around 0.6685 during Thursday’s Asian session trading. In doing so, the kiwi pair pays a little heed to the recently published New Zealand (NZ) Electronic Card Retail Sales and comments from Air NZ. The reason could be traced from the market’s overall risk-on mood and the US dollar weakness.
Nothing to cheer for the RBNZ…
NZ Electronic Card Retail Sales not only reversed the yearly gains of 11.4% with -0.8% but also slumped 7.9% in August versus +1.2% (revised) prior on MoM. The data adds to the Reserve Bank of New Zealand’s (RBNZ) bearish bias even as the central bank lastly said not concerned about the NZD/USD rate.
Also challenging the kiwi could be the comments from the Air NZ suggesting that the recovery of international network post coronavirus (COVID-19) now looking slower than initially thought. The Air NZ grounds 777 flights until September 2021 in its latest update.
Even so, S&P 500 Futures flash 0.25% gains to 3,408 after Wall Street managed to consolidate the tech rout the previous day.
Other than the recovery in the equities, weakness in the US dollar index (DXY), for the first time in the last seven days, also offered positive support to the quote. While searching for the reason, chatters concerning the European Central Bank (ECB) policymakers’ optimism and talks between the US and TikTok parent ByteDance gain major attention.
Moving on, the Asian calendar is mostly empty and hence traders will keep eyes on the risk factors for immediate direction. However, the ECB and US weekly jobs data will be the key afterward. The ECB isn’t expected to roll out any change to its monetary policy and may reiterate the bearish bias. On the other hand, “the US initial claims data are expected to show ongoing improvement in the US labor market, but the main focus is on continuing claims data which are indicative of the pace of return to work in the US. Decent data could lend the USD support,” said the Australia and New Zealand Banking Group (ANZ).
Technical analysis
Although pullback from the 50-day SMA, at 0.6616 now, propels the quote towards 0.6700, the further upside can be tamed by the 10-day SMA level of 0.6711.
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