If risk appetite strengthens, NZD/USD could bounce

NZD/USD,H4

The NZ government is continuing with plans to ease lockdown restrictions as the number of Covid-19 continues to fall. The New Zealand Dollar has rebounded sharply and has more room to move higher, if risk appetite improves. NZDUSD is up 0.86% on the month and is trading above the 0.7100 level as of the time of writing. If economic conditions improve and the RBNZ can move forward with a rate hike, the New Zealand Dollar should respond with further strength.

The ANZ Business Outlook for September was released early due to Covid, and the reading showed an improvement from the August release. Business Confidence rose to -6.8, up from -14.2 previously. The survey also found that inflationary pressures have eased, but cost pressures remain high. Meanwhile, on Wednesday (15/09), Q2 GDP data will be released. With the combined effects of the pandemic and the implementation of the intensive lockdown, the economy is likely to suffer and struggle to repeat the strong 1.6% gain in Q1. However, the consensus is around 1.3%, which still shows signs that the recovery is continuing at a good pace.

The pair continued consolidating for the 7th day after being stuck at 0.7169, which was the previous neckline range, and also formed a lower high of 0.7155 at the end of last week. Yesterday (13/09) the price barely moved and only traded in a tight space of around 25 pips validated by the RSI spreading between the 50 levels. Last week’s top price cap, in the absence of a strong break to the upside, would be the 3rd peak lower and send the price to retrace the support levels from the 0.6804 advance.

Immediate minor support is at 0.7075. A break of this level will target the 0.7000 round number (around the 50% FR area of the 0.6804-0.7169 low). As long as the 0.7075 minor support holds, the bias will return to the upside for 0.7155 and 0.7169. A break of these two resistance levels would confirm the decline from 0.7463 while strengthening would accelerate the bull’s dominance to the north to 0.7315.

EUR/USD climbs to two-week highs beyond 1.1900

EUR/USD is keeping its foot on the gas at the start of the week, reclaiming the 1.1900 barrier and above on Monday. The US Dollar remains on the back foot, with traders reluctant to step in ahead of Wednesday’s key January jobs report, allowing the pair to extend its upward grind for now.

GBP/USD hits three-day peaks, targets 1.3700

GBP/USD is clocking decent gains at the start of the week, advancing to three-day highs near 1.3670 and building on Friday’s solid performance. The better tone in the British Pound comes on the back of the intense sekk-off in the Greenback and despite re-emerging signs of a fresh government crisis in the UK.

Gold treads water around $5,000

Gold is trading in an inconclusive fashion around the key $5,000 mark on Monday week. Support is coming from fresh signs of further buying from the PBoC, while expectations that the Fed could turn more dovish, alongside concerns over its independence, keep the demand for the precious metal running.

Crypto Today: Bitcoin steadies around $70,000, Ethereum and XRP remain under pressure

Bitcoin hovers around $70,000, up near 15% from last week's low of $60,000 despite low retail demand. Ethereum delicately holds $2,000 support as weak technicals weigh amid declining futures Open Interest. XRP seeks support above $1.40 after facing rejection at $1.54 during the previous week's sharp rebound.

Japanese PM Takaichi nabs unprecedented victory – US data eyed this week

I do not think I would be exaggerating to say that Japanese Prime Minister Sanae Takaichi’s snap general election gamble paid off over the weekend – and then some. This secured the Liberal Democratic Party (LDP) an unprecedented mandate just three months into her tenure.

Ripple exposed to volatility amid low retail interest, modest fund inflows

Ripple (XRP) is extending its intraday decline to around $1.40 at the time of writing on Monday amid growing pressure from the retail market and risk-off sentiment that continues to keep investors on the sidelines.