NZD/USD remains range bound, weighed by USD strength
|- NZD/USD is traded within a range but is weighed by the US dollar.
- COVID-19 is a driving force, which could give the kiwi an edge.
NZD/USD is currently trading at 0.6630 between a low of 0.6596 and a high of 0.6660 as it corrects 50% of the recent bearish impulse.
Risk sentiment improved following the prior day's sell-off in financial and commodity markets,
Better-than-expected US Gross Domestic Product and initial claims data helped to boost risk sentiment and enabled a slight recovery in US equities higher ahead of Apple, Facebook, Amazon and Alphabet reporting.
However, commodities remain under pressure, likely to do with the stronger USD, and both have hamstrung the kiwi.
The ECB’s softer outlook and promise to ease more that really got the USD moving when ECB President Lagarde said that there is “little doubt” that a set of additional policy measures will be agreed upon at the December meeting due to the challenges facing Europe’s economy mount along with COVID cases.
''Kiwi likely to do better''
However, there is a bullish prospect in such sentiment for the bird and analysts at ANZ Bank noted that NZD is really just range-trading because of it:
''As we noted yesterday if global lockdown fears and concerns about the pandemic continue to rage and NZ does a better job containing it, the NZD is likely to do better, as it did in May.''
NZD/USD technical analysis
NZD/USD bears looking for a weekly extension to 0.6450
As per the prior analysis above, and as illustrated in the following chart, there is a bearish bias on the longer-term time frames:
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