- NZD/USD retraces gains from an eight-day high within a 20-pip trading range above 0.6808.
- New Zealand’s fortnightly GDT Price Index, Q2 Current Account beat forecasts.
- Market sentiment stays mildly positive amid mixed catalysts, pre-Fed caution.
- NZ Treasury’s PREFU, risk-related updates will offer intermediate clues.
NZD/USD takes rounds to 0.6710/15 amid the pre-Tokyo open Asian trading on Wednesday. In doing so, the kiwi pair pays a little heed to New Zealand’s second-quarter (Q2) Current Account details while waiting for the Pre-election Economic and Fiscal Update (PREFU) from Treasury. Also restricting the pair’s moves could be the pre-Fed cautious sentiment and light news feed.
Traders ignore second-tier data…
Be it Australia’s downbeat House Price Index or New Zealand’s (NZ) Current Account details that beat forecasts, market players showed a little reaction to the economics. New Zealand’s Current Account balance grew past-$0.595B forecast and $-1.557 prior to $1.828B whereas the Current Account to GDP ratio recovered from -2.5% market consensus to -1.9% in the second quarter of 2020.
The reason for the lack of market reaction can be traced from the generally followed tight trading patterns ahead of the key data/events and/or mixed catalysts concerning the risk events. Among the central bankers, the upcoming Federal Open Market Committee (FOMC) meeting, up for announcement at 18:00 GMT, gains the major market attention ahead of the next week’s monetary policy meeting by the Reserve Bank of New Zealand (RBNZ).
It should also be noted that the NZ Treasury’s update on the national economics, including the forecast of Q2 GDP and state of government finances, scheduled for publishing at 01:00 GMT, can offer immediate direction to the pair and hence make the quote additionally nervous. Ahead of the event, the Australia and New Zealand Banking Group (ANZ) said, “Do not expect any new policy announcements, as the PREFU is a Treasury document designed to inform the voter about the state of the books ahead of the election and ensure no surprises for the incoming Government.” However, the update from the government becomes the key for the pair traders to watch.
Also acting as the trade barriers are non-uniform risk signals. Although the latest verdict from the World Trade Organization (WTO), against the US sanctions on China, question the risk-on mood, the previously scaled back anti-trade measures by Washington and Beijing favor the market optimism. It should also be noted that the news concerning the coronavirus (COVID-19) vaccine from the University of Pittsburgh School Of Medicine also adds to the market confusion.
Amid all these plays, S&P 500 Futures drop 0.08% after Wall Street barely managed to ignore the negative closing.
Looking forward, updates from NZ Treasury will be the key but major attention will be given to the US FOMC announcements where the economic forecasts become crucial to watch.
Unless declining back below an ascending trend line from August 20, at 0.6637 now, buyers may keep struggling to refresh the monthly high of 0.6790 with the 0.6800 threshold.
Additional important levels
|Today last price||0.6716|
|Today Daily Change||15 pips|
|Today Daily Change %||0.22%|
|Today daily open||0.6701|
|Previous Daily High||0.6719|
|Previous Daily Low||0.6661|
|Previous Weekly High||0.6724|
|Previous Weekly Low||0.6601|
|Previous Monthly High||0.6764|
|Previous Monthly Low||0.6488|
|Daily Fibonacci 38.2%||0.6697|
|Daily Fibonacci 61.8%||0.6683|
|Daily Pivot Point S1||0.6668|
|Daily Pivot Point S2||0.6636|
|Daily Pivot Point S3||0.6611|
|Daily Pivot Point R1||0.6726|
|Daily Pivot Point R2||0.6751|
|Daily Pivot Point R3||0.6784|
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.