NZD/USD: Mildly bid above 0.6500 as trading sentiment stays upbeat
|- NZD/USD recedes from 0.6545 following the previous day’s bounce off 0.6502.
- Upbeat earnings report, hopes of virus cure keep buyers hopeful.
- NZ PM Ardern cited fears of wave 2.0 leading to local lockdowns but refrained from limiting travel to Australia.
- US President shuns Hong Kong’s special trading status but Beijing shrugs it off.
NZD/USD rises to the intraday high of 0.6547 during the initial Asian session on Wednesday. The kiwi pair recently benefited from the market’s risk-on mood while extending the previous day’s recovery moves. However, worrisome comments from New Zealand (NZ) Prime Minister (PM) Jacinda Ardern tame the bulls.
In her latest speech, NZ PM Ardern suggested increased possibilities that the coronavirus (COVID-19) re-enter the nation via borders. If that happens, the national leader said, “first response may be localized lockdowns.” Though, resistance to close borders with the largest trading partner Australia keeps the buyers hopeful.
Earlier during the day, pair traders cheered upbeat performance of Wall Street after major US banks managed to print welcome results. Further magnifying the optimism were US President Donald Trump’s signals for the nearness to the virus vaccine. The Republican leaders’ comments followed Moderna’s statements conveying ‘robust’ results of the third trial, which in turn helps to plaster the market mood and favor the NZD/USD pair.
Though, US President Trump said, “You’ll see more coming on actions towards China” and suggests escalations of the Sino-American tussle. On the other hand, Beijing frets about the cancellation of Hong Kong’s special trading session, per Global Times, while saying they were expecting more.
Amid all these catalysts, S&P 500 Futures remain on the front foot above 3,200, up 0.86% on a day, whereas the US 10-year Treasury yields extend the previous day’s rise by 2.4 basis points to .638%.
Considering the lack of major data/events, the pair traders will have to pay close attention to risk catalysts for immediate direction. In doing so, virus updates and US-China story might be in the spotlight.
Technical analysis
The pair’s failure to close below a two-month-old support line, currently around 0.6540, propels it towards the monthly top near 0.6600.
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