NZD/USD: Bulls attack 0.7100 with eyes on US covid aid package amid quiet markets
- NZD/USD regains 0.7100 despite the previous day’s pullback from 0.7139.
- Wall Street benchmarks refreshed record tops on US stimulus news.
- Aussie-China tussle gets a little amid holidays thinned trading, light calendar.
- Risk catalysts keep the driver’s seat, updates from Capitol Hill can offer immediate direction.
NZD/USD buyers keep recovery moves from 0.7083 while battling 0.7100 during early Tuesday morning in Asia. In doing so, the kiwi pair struggles to justify upbeat trading sentiment, backed by the coronavirus (COVID-19) aid package updates from the US, amid lesser volumes due to the year-end holidays.
In rare support to the Republican leader, US House Democratic Party members backed President Donald Trump’s demand of a $2,000 paycheck while signing the much-awaited stimulus. The relief bill now heads to the Senate where Republicans have a majority and might block the road by citing budget deficits.
Global markets cheered risk-on mood with a pinch of salt amid off in multiple markets, including New Zealand. Even so, Wall Street benchmarks refreshed record top while S&P 500 Futures print mild gains by press time.
Although equities gained, the US dollar’s corrective recovery probed the NZD/USD buyers the previous day. Also challenging the kiwi bulls were the anticipated tension between Australia and China, two of New Zealand’s biggest customers. The downbeat concerns grew after China marked lower Aussie copper imports since January 2017 whereas Australia insists tough World Health Organization (WHO) inquiry into the COVID-19 origin.
While the US stimulus updates can keep entertaining markets amid a light calendar, covid and vaccine headlines, coupled with news concerning China can offer extra direction to the NZD/USD moves, expectedly to the north.
Technical analysis
Although 10-day SMA, near 0.7110, followed by an eight-day-old resistance line around 0.7135, restricts the short-term upside, NZD/USD sellers may not risk entries unless witnessing a clear downside break below 21-day SMA, at 0.7084 now.