NZD/USD consolidates in a range, holds comfortably above 0.6800 amid thin trading volumes
|- Easing Omicron fears continued lending some support to the perceived riskier kiwi.
- A modest USD strength held back bulls from placing fresh bets and capped NZD/USD.
The NZD/USD pair lacked any firm directional bias on Friday and remained confined in a range, around the 0.6825-30 region through the early European session.
A combination of diverging forces failed to provide any meaningful impetus to the NZD/USD pair and led to subdued/range-bound price action on the last trading day of the year. The underlying bullish sentiment in the financial markets continued acting as a tailwind for the perceived riskier kiwi. That said, a modest US dollar strength acted as a headwind and kept a lid on any meaningful gains.
The global risk sentiment remained well supported by the latest optimism over signs that the Omicron variant might be less severe than feared and is unlikely to derail the economic recovery. This, to a larger extent, helped offset concerns about the continuous surge in new COVID-19 cases and boosted investors' sentiment, which was evident from the recent runup in the global equity markets.
Meanwhile, the greenback gained some traction for the second successive day and was underpinned by Thursday's upbeat US macro data. In fact, the US Initial Jobless Claims fell more than anticipated, to 198k in the week ended December 24 – marking the lowest level since 1969. Separately, the Chicago PMI also surpassed expectations and rose to 63.1 for the current month from 61.8 in November.
This, in turn, held back traders from placing aggressive bullish bets around the NZD/USD pair and capped the upside. The mixed fundamental backdrop warrants some caution before positioning for the near-term direction amid absent relevant market-moving economic data and thin trading volumes on New Year’s Eve.
Technical levels to watch
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.