NZD/USD edges higher around 0.6770s as Omicron worries abate

After reaching a new year-to-date low on Monday, the NZD/USD is staging a comeback on Tuesday’s New York session, trading around 0.6772 at the time of writing. The market sentiment is upbeat, as portrayed by global equity markets, which are making gains. Although the newly discovered Omicron variant is more contagious than other strains, COVID-19 patients with that variant have only shown mild symptoms. Also, crossing the wires, an antibody treatment created by Glaxo works on the Omicron variant, as reported by studies.

In the overnight session, the NZD/USD dipped to a new year-to-date low at 0.6735, then rebounded towards the 100-hour simple moving averages (SMA), dynamic resistance that stalled the upside move triggered by US dollar weakness. In the last couple of hours, the greenback regained some demand, pushing the pair towards the 50-SMA at 0.6754 to stabilize at current levels.

An absent economic docket in New Zealand and the US left the NZD/USD pair relying in the dynamics of market sentiment, the USD, and China’s news. 
During the Asian session, China reported that its Exports increased by 22% dollar-denominated up to $326 billion, while imports grew almost 32% to about $254 billion. Estimates were in the range of 20.3% and 21.5%, respectively. According to sources cited by Bloomberg, “exports picked up in line with seasonality in November and suggest still pretty solid momentum in external demand.”

NZD/USD Price Forecast: Technical outlook

On the 1-hour chart, the NZD/USD pair is trading to the upside in the near term, but downside risks remain. The 100-SMA at 0.6782, which confluences around the R3 daily pivot level, could stall any upward move, as previously done three times throughout the day. That, alongside the 50-SMA at 0.6754, might keep the pair trading sideways due to the lack of a catalyst other than pure market sentiment.

In the event that it should break above the 100-hour SMA, the first line of resistance would be the 200-hour SMA at 0.6805. A breach of that level would expose the December 2 high at 0.6830.

On the other hand, a break below the 50-hour SMA would expose the year-to-date low at 0.6736, followed by the figure at 0.6700.