This is indicated by the dynamic of AUD and NZD. Markets are shaking off the fears of coronavirus as the number of new cases decreases. The main sentiment of politicians and heads of central banks in recent days was the phrase "risks are yet to be assessed". But this is more like the inherent caution of central bankers. Assessing their own economies, more and more central banks are inclined to be optimistic.

Of particular interest are comments and forecasts from Australia and New Zealand, which are tightly bound to export raw materials and products to China. In both cases, the estimates were more optimistic, causing NZD and AUD purchases to strengthen.


RBNZ comments, published before the Asian session, caused NZDUSD to jump by 0.7%, potentially reversing the downward trend of the last two months. The comments noted that employment in the country remains above its maximum sustainable level, while low-interest rates and fiscal stimulus will further boost economic growth in the second half of the year. Coronavirus is expected to have short-term effects, with the main impact only in the first half of 2020.

After these comments, the New Zealand dollar experienced a sharp increase from the level of 0.6400. In addition, the NZDUSD currency pair left the oversold area on the RSI index, which may symbolize the reversal. Overcoming the level of 0.65 is likely to convince the markets in growth. It is a significant round level near the 200 SMA.


The dynamics of the Australian dollar is also setting an optimistic trend. The AUDUSD is rising on the third day, starting from the 11-year low at 0.6660, pushing the pair to 0.6720 at the time of writing. The dynamics of this pair is an important indicator of investor sentiment towards China, so further growth may be indicative. Potentially, a steady upside reversal could break the two-year downward trend in AUDUSD, due to both structural deceleration of China and fears of the consequences of trade disputes between the two largest world economies.

The speech of Fed head Powell on this topic should not be ignored either. In his speech to the U.S. Congress, he noted the stability of the national economy, despite the likely slowdown in China. These comments, although they put a brief pressure on stock indices, still reflect confidence in the future growth prospects of the economy. This is good rather than bad for the market in the medium-term.

FxPro UK Limited is authorised and regulated by the Financial Services Authority, registration number 509956. CFDs are leveraged products that incur a high level of risk and it is possible to lose all your capital invested. Please ensure that you understand the risks involved and seek independent advice if necessary.

Disclaimer: This material is considered a marketing communication and does not contain, and should not be construed as containing, investment advice or an investment recommendation or, an offer of or solicitation for any transactions in financial instruments. Past performance is not a guarantee of or prediction of future performance. FxPro does not take into account your personal investment objectives or financial situation. FxPro makes no representation and assumes no liability as to the accuracy or completeness of the information provided, nor any loss arising from any investment based on a recommendation, forecast or other information supplied by any employee of FxPro, a third party or otherwise. This material has not been prepared in accordance with legal requirements promoting the independence of investment research and it is not subject to any prohibition on dealing ahead of the dissemination of investment research. All expressions of opinion are subject to change without notice. Any opinions made may be personal to the author and may not reflect the opinions of FxPro. This communication must not be reproduced or further distributed without the prior permission of FxPro. Risk Warning: CFDs, which are leveraged products, incur a high level of risk and can result in the loss of all your invested capital. Therefore, CFDs may not be suitable for all investors. You should not risk more than you are prepared to lose. Before deciding to trade, please ensure you understand the risks involved and take into account your level of experience. Seek independent advice if necessary. FxPro Financial Services Ltd is authorised and regulated by the CySEC (licence no. 078/07) and FxPro UK Limited is authorised and regulated by the Financial Services Authority, Number 509956.

Analysis feed

Latest Forex Analysis

Editors’ Picks

EUR/USD looks to test 1.0800 ahead of German ZEW

Despite the latest recovery attempt from a new 34-month of 1.0823 reached in early Asia, the sentiment around the EUR/USD pair remains undermined by the German economic growth concerns and broad US dollar strength. Focus on German ZEW, coronavirus updates.


GBP/USD extends losses to sub-1.3000 area, UK unemployment rate in focus

GBP/USD stays mildly negative just below 1.30 while heading into the London open on Tuesday. UK’s Brexit negotiator shares the same view as PM Boris Johnson, increases the risks of hard departure. UK employment statistics will be the key to clarify on the BOE’s bearish bias.


Forex Today: Risk sold amid coronavirus-led rising economic costs; a busy docket ahead

Despite upbeat US-China trade headlines and a slowdown in coronavirus infection in China, the risk appetite was battered in Asia this Tuesday, in light of the warning issued by Apple Inc. that highlighted rising economic costs due to the coronavirus impact.

Read more

Gold: Positive beyond six-week-old falling trendline

Gold prices take the bids above $1585, +0.35%, during the pre-European trading on Tuesday. The yellow metal recently broke a downward sloping trend line stretched from January 08. Early-month top on the buyer’s radar.

Gold News

FXStreet launches Real-Time Trading Signals

FXStreet Signals offers access to explanatory live webinars, real-time notifications when signals are triggered and exclusive membership to the company’s Telegram group, where users get direct guidance by our analysts and get room to discuss and interact.

More info

Forex Majors