NZD/USD recovery fizzles on risk reset, still above 0.5900

NZD/USD refrains from extending the previous day’s recovery gains while stepping back to 0.5930 during Tuesday’s Asian session. The kiwi pair earlier benefited from the pause in coronavirus (COVID-19) carnage in the global hot-spot. Though, the recent declines in New Zealand data and comments from US President Donald Trump seemed to have checked the market’s risk-on sentiment.

New Zealand Institute of Economic Research’s (NZIER) Quarterly Survey of Business Opinion suggested a slump to -70% figure versus prior -21% during the first quarter (Q1) of 2020. However, the survey date preceded the announcement by the Government of the Alert Level 4 lockdown across the country and hence offered a little help for any major trade decision.

US President Donald Trump, during his Coronavirus Task Force Briefings, cited fears of worsening situations in the US, mainly due to the virus outbreak, while also asked China for help. The US leader also disliked Indian decision on the exports of Hydroxychloroquine and suggested retaliation.

With the recent challenges to the risk, US stock futures fail to follow Wall Street gains while stepping back to near 0.30% loss by the press time.

The pair’s earlier recovery moves could be attributed to the early positive signs from Italy and Spain, coupled with upbeat comments from the New York Governor Andrew Cuomo.

Given the release of domestic data, the kiwi traders may now follow Aussie trade numbers and RBA meeting updates for fresh impulse. Although the Reserve Bank of Australia (RBA) is widely expected to wait for fresh clues before extending its monetary policy combat with the virus, comments from the policy statement will be watched closely.

Technical analysis

NZD/USD remains capped by 21-day SMA, currently near 0.5945, a break of which could challenge 0.6000 round-figure ahead of targeting March 27 high surrounding 0.6070.