NZD/USD extends losses towards 0.6300 amid broad risk-off
|- NZD/USD stays on the back foot as coronavirus fears weigh on the markets.
- China’s deadly virus spreads faster in Europe, calls of vaccine remain doubtful.
- The US officials flashed mixed signals, Tokyo Olympics in limbo.
Despite bouncing off in the last minutes to 0.6320, NZD/USD fails to overcome the previous day’s negative tone amid the initial Asian session on Wednesday. The coronavirus outbreak ex-China has been disappointing the global traders off-late. Even so, the latest headlines suggesting China to fully meet the phase-one deal terms despite the epidemic seems to have questioned the broad risk-off.
The South China Morning Post (SCMP) recently came out with the news, relying on the US official, to claim that China ‘fully expected’ to meet trade deal terms despite coronavirus.
The pandemic recently reached a few more of the European nations including Spain, Croatia and Switzerland while infecting additional numbers of people in Asian nations like South Korea and Singapore.
Global Times took a U-turn from its own headlines suggesting a cure to the respiratory virus has been found while depending upon the experts whereas the World Health Organization (WHO) still refrains from terming coronavirus as a global threat. Even so, the US CDC officials are still cautiously optimistic while believing that the immediate risk from coronavirus in the US remains low. Furthermore, the AP News raised doubts about the upcoming Tokyo Olympics while relying on the comments from the senior member of the International Olympic Committee.
Amid all these, the risk-tone seems to recover the recent losses as S&P 500 Futures register 0.44% gains to 3,146 whereas the US 10-year treasury yields extend bounce off the multi-year low to 1.354%, +2.4 basis points (bps), by the press time.
Given the lack of major data/events on today’s economic calendar, traders will keep eyes on the coronavirus updates for fresh direction.
Technical Analysis
Sellers look for sustained trading below 0.6300 to take aim at the downside levels visited during October 2019 around 0.6240 and 0.6200. Meanwhile, February 11 low, close to 0.6380, acts as the near-term key resistance.
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