NZD/USD: Bulls await fresh clues at 33-month high near 0.7250, virus, Georgia’s election in focus
- NZD/USD wavers in a choppy range between 0.7250 and 0.7260 after refreshing multi-month high the previous day.
- Return of risks refreshed US dollar declines, backed commodities and Antipodeans, NZ GDT also favored buyers.
- Noise surrounding China ignored, vaccine hopes battle virus woes.
- China’s Caixin Services PMI, Georgia runoff will be important to watch.
NZD/USD buyers catch a breather around the highest since April 2018, flashed on Tuesday, while taking rounds to 0.7250-60, currently at 0.7251, during the early Wednesday morning in Asia. The pair tracked broad risk-on mood and cheered the US dollar gains off-late. However, a lack of major catalysts and wait for Georgia’s runoff election results seem to trigger the latest pause in the rally.
Markets stay hopeful against all odds…
Although Georgia recently became another US state to have the fist coronavirus (COVID-19) variant case and lockdown persists in European countries and the UK, not to forget pushing Japan towards the same, risk sentiment improved during mid-Tuesday. It should be noted that the US Treasury Secretary Steve Mnuchin recently disagreed with the New York Stock Exchange’s (NYSE) decision to keep China telecommunication stocks listed. This reveals the Sino-American tension and should have weighed on risks at a time when the New York Post quotes World Health Organization (WHO) Chief Tedros Adhanom Ghebreyesus blaming China for blocking probe into origins of COVID-19.
On the positive side, upbeat US ISM Manufacturing PMI data for December, 60.7 versus 56.6 expected, as well as chatters over the covid vaccines and hopes of Democrats’ victory in Georgia runoff. Also favoring the quote could be the OPEC+ decision to further curb oil output and the latest New Zealand’s GDT Price Index figures, 3.9% versus 0.0% expected and 1.3% forecast.
Against this backdrop, Wall Street benchmarks ended Tuesday on an upbeat tone while the US 10-year Treasury yields gained 3.5 basis points (bps) to 0.952% by press time.
Considering the lack of major data/events at home, coupled with the nearness to election results from Georgia that will decide which party will dominate in the US Senate, risk catalysts are likely to remain in the driver’s seat. Though, China’s December’s Caixin Services PMI, expected 51 versus 57.5 prior, coupled with the virus updates, will also be important to watch.
Technical analysis
A two-month-old ascending trend line, near 0.7140, backs the NZD/USD buyers targeting April 2018 top near the 0.7400 threshold.
Author
Anil Panchal
FXStreet
Anil Panchal has nearly 15 years of experience in tracking financial markets. With a keen interest in macroeconomics, Anil aptly tracks global news/updates and stays well-informed about the global financial moves and their implications.
