NZD/USD remains on the recovery mode near 0.6670 amid greenback weakness
|- NZD/USD holds onto recovery gains beyond 21-day SMA as the market’s risk-off sentiment dwindles.
- Trade/political headlines and Markit data saved traders from further hardships.
- Qualitative catalysts, US data will be the key drivers.
NZD/USD trades near 0.6672 at the start of Tuesday’s Asian session. The kiwi pair extends the week-start pullback from 0.6644 as the market’s risk sentiment has mostly been on the recovery mode, which in turn cut the US dollar's (USD) safe-haven demand and helped the most commodity-linked currencies including the New Zealand dollar (NZD).
The risk-off mood seems to have soothed off-late, maybe due to the absence of no news threats from either the US or Iran. Also, global leaders’ efforts to de-escalate the fears of war might also have contributed to lifting the trade sentiment. Additionally, upbeat prints of final Markit Composite PMIs from most global economies could also have receded market fears.
On the trade front, Bloomberg and SCMP came out with news that Beijing will send its trade delegation to the US sometime during the next week.
As a result, the US 10-year treasury yields rise nearly two basis points (bps) to 1.8% whereas Wall Street also stays mildly bid.
A lack of major data/events on the economic calendar, investors will keep eyes on the trade/political headlines ahead of the US session when ISM Non-Manufacturing PMI and Factory Orders will be in the spotlight.
Technical Analysis
21-day SMA and mid-December 2019 top offer immediate support around 0.6635 whereas 0.6700 area acts as the short-term resistance.
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