NZD/USD probes the latest pullback with eyes on coronavirus news

  • NZD/USD questions the recent U-turn from 0.6300 amid mixed clues concerning coronavirus.
  • China, WHO and the US are flashing upbeat signals while global players like Mastercard and United Airlines keep traders worried.
  • A lack of major data/events will keep coronavirus headlines on the driver’s seat.

NZD/USD keeps it between 0.6333 and 0.6343, currently around 0.6340, while marking no major changes during the early Asian session on Tuesday. Despite the week-start gap down, mainly due to coronavirus fears, the kiwi pair has been on recovery mode amid positive signals from China. However, the buyers are waiting for fresh clues to extend the pullback from the lowest in four months.

With the next RBNZ meeting be in May, upbeat signals from China and the World Health Organization (WHO) seem to push the NZD/USD buyers towards expecting further recoveries in the Chinese epidemic. On Monday, many of the Chinese provinces lowered down emergency levels while also citing fewer cases of the coronavirus (COVID-19) infections and deaths. Further, the WHO also contributed to the upbeat expectations while tweeting that the deadly virus peaked between late-January and early February. It should also be noted that the latest comments from the US President and the Federal Reserve Cleveland President Loretta Mester also downsized the contagion risk.

On the other hand, Italian PM Conte warned of a strong impact of the coronavirus on the economy while Mastercard and United Airlines were the latest in the league of pessimists.

The market’s risk-tone remains mostly negative as coronavirus spread outside China, recently in Oman, seems to threaten the trade sentiment. While portraying the same, the US equity benchmarks nosedived and the US treasury yields also dropped heavily by the end of their trading on Monday. At present, the S&P 500 Futures recovers 0.28% to 3,236 versus the previous declines of more than 3.0%.

On Monday, New Zealand PM Jacinda Ardern extended travel ban from China for another eight days while the fourth quarter (Q4) Retail Sales slipped below 1.7% prior to 0.7%.

Traders will now look for fresh clues to determine near-term direction amid an absence of major data/events at home. In doing so, coronavirus will be their go for search.

Technical Analysis

A confluence of 10-day SMA and a downward sloping trend line from January 24, around 0.6390 seems to restrict the pair’s near-term recoveries. On the downside, a sustained break below 0.6300 could challenge October 16, 2019, low surrounding 0.6240.

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. The author will not be held responsible for information that is found at the end of links posted on this page.

If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.

FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.

The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.

Feed news

Latest Forex News

Latest Forex News

Editors’ Picks

EUR/USD remains pressured after US data misses estimates

EUR/USD is trading closer to 1.1750, paring its recovery from earlier in the day as the safe-haven dollar is bid. US Consumer Sentiment missed estimates with 72 points in September. The financial woes of China's Evergrande are weighing on sentiment.


GBP/USD trades under 1.38 amid on UK data, dollar strength

GBP/USD is on the back foot, trading under 1.38 after UK Retail Sales figures disappointed with -0.9% in August, worse than expected. Brexit uncertainty and dollar demand weighed on the pair earlier. 


XAU/USD surrenders intraday gains, drops closer to $1,750 level

Gold struggled to preserve its intraday gains and dropped to the lower end of the daily trading range during the early North American session. 

Gold News

Experts say Ripple will win SEC lawsuit, which might propel XRP to new all-time highs

The latest development in the ongoing SEC vs. Ripple lawsuit is that documents are classified as privileged and blocked for public viewing. Though institutional investors are yet to take big bets on the altcoin in 2021, retail investors are actively trading in XRP.

Read more

US Michigan Consumer Sentiment Preview: Markets will have to look hard for positive signs

Consumer outlook expected to rebound to 72.2 in September. August’s 70.2 was the lowest since December 2011. Inflation and Delta variant wearing on US optimism. Markets face negative dollar risk from fading consumer optimism.

Read more