- NZD / USD bulls are taking a break after probing their March high of 0.6374.
- The sense of risk-tone diminishes amid mixed messages from the United States.
- Australian data, risk catalysts will be key in the absence of major New Zealand updates.
The NZD / USD fell from 0.6374, the highest since March, to 0.6365 at the time of the press in the first Asian session Wednesday. While the earlier rise in the kiwifruit pair could be attributed to the general sense of risk and the weak US dollar, the recent decline may have caused U.S. indices to stop near the multi-day high.
NBC cites fears of second wave of coronavirus (COVID-19) in the United States, while Axios reports that US President Donald Trump backtracks from using federal forces to tame riots after suggesting the same thing the day before.
The cautious optimism about the vaccine against the virus could also be confusing for Anthony Fauci, director of the American National Institute of Allergies and Infectious Diseases (NIAID).
On Tuesday, the US dollar index (DXY) rekindled the 12-week low amid fears of widespread protests against the alleged murder of Minnesota George Floyd. Risk sentiment in the market also weighed on the greenback, in the hope of an economic recovery in Europe and also following the heightened hopes of further stimulus from the ECB.
That said, the S&P 500 Futures gained 0.10% to 3,080 at the time of press. In doing so, the risk barometer reverses initial losses of the same magnitude.
Given the lack of major data / events from New Zealand, traders of kiwi pairs will rely on a wealth of major economic data from Australia. Among them, Australian GDP in the first quarter (Q1), expected -0.3% QoQ against + 0.5% previously, will be the key to watch.
Despite crossing the 200-day SMA on a daily closing basis, the quote has not yet crossed the lows of early February near 0.6380, which could in turn trigger the pair’s decline in the middle of the RSI overbought, to revisit the key SMA near 0.6315.