- The NZD / USD remains auctioned for the second consecutive day after posting the largest daily gains in more than seven weeks.
- The New Zealand PPI shows optimistic figures, traders applaud the general feeling of risk.
- A new tension between Australia and China seems to offer a respite to the bulls.
- Qualitative catalysts will dominate in a light schedule.
The NZD / USD remains bid around 0.6040 during the first Asian session on Tuesday. The pair appear to be following the overall feeling of risk, while ignoring the recent Aussie-China fights and optimistic New Zealand PPI data.
New Zealand’s first quarter producer (Q1) producer price index and output figures are below market consensus by 0.7% and 0.2% to 0.1% and -0.3% respectively. However, the pair’s traders seem to remain optimistic the previous day.
In doing so, kiwi traders are also paying little attention to the recently renewed Aussie-China tension after China confirmed 80% tariffs on Australian barley after banning meat from certain Australian processors last week. In response to the decision, Australian Minister for Agriculture Simon Birmingham said Australia was “deeply disappointing” and was considering going to the World Trade Organization on the matter.
Despite this, the S&P 500 Futures follows in the footsteps of Wall Street and posts gains of 0.25% to 2,952 at the time of the press. It should be mentioned that yields and US Treasuries posted notable gains during Monday’s optimistic sentiment.
On Monday, global markets applauded the new optimists regarding new developments in curing the coronavirus (COVID-19). These measures were also bolstered by growing hopes of new stimulants from world leaders as well as a surge in commodities amid expectations of China’s return to pre-virus status, in terms of demand of oil.
Given the lack of major calendar data / events, traders will keep their eyes on trade / virus updates for immediate direction.
The 50-day EMA near 0.6075 offers immediate resistance to the pair before the decreasing trend line from December 31, 2019, to 0.6125 now. During the pair’s declines, 0.6000 acts as a near support before the monthly low near 0.5920.