NZD/USD extends Thursday’s recovery moves to weekly top, flirts with 0.6100

NZD/USD takes the bids near 0.6100 by the press time of Friday’s initial Asian session. The kiwi pair currently probes the weekly high while carrying the previous day’s heavy recovery moves. The reasons could be traced from the broad US dollar weakness and mild risk-on sentiment.

In addition to the downbeat US Jobless Claims, comments from the Fed policymakers, suggesting the worst is ahead, added to the greenback’s weakness on Thursday. Further, the negative print by the Fed funds futures, an early signal for the Fed rate, also weighed on the US dollar.

Considering the risks, Bloomberg came out with the news that the US and China will restart trade talks as soon as early next week. Both the countries were at loggerheads off-late and the update eased tension. Even so, the latest allegations by the White House trade adviser Peter Navarro that China vacuumed up all of the world's Personal Protective Equipment (PPE) could renew worries.

Elsewhere, New Zealand’s government recently released a financial statement as a part of the nine-month budget update. The released report said, “The government fiscal response to the COVID-19 outbreak has sent the budget into deficit. As the response continues the deficit will grow.” However, the Kiwi pair paid a little heed to the news and held gains so far.

Traders may now look for more of the trade/virus updates ahead of the US April month employment data for intermediate moves. Also, the RBA’s Statement of Monetary Policy (SOMP) could be considered as an additional catalyst amid a light calendar.

Technical analysis

A sustained break of 50-day EMA pushes the kiwi pair further up towards April top near 0.6175 ahead of making it confront the 100-day EMA near 0.6200. Alternatively, a downside break below 50-day EMA level of 0.6085 could avail 21-day EMA and Thursday’s low, respectively around 0.6040 and 0.5995/90, as supports.