NZD/USD: Bulls attack 0.7200 amid a quiet Asian session during the key week
- NZD/USD picks up bids after bouncing off 0.7167 before a few hours.
- Risks dwindle amid mixed signals on vaccine, geopolitics.
- Wall Street closes positive after a dull start to the week, US 10-year Treasury yields eased.
- NZIER rekindled hopes of strong NZ GDP, pre-Fed caution holds the throne before that.
NZD/USD refreshes intraday high with 0.7207 during the initial Asian trading session on Tuesday. In doing so, the kiwi pair justifies recently positive mood in the market amid a quiet session ahead of this week’s key events like the Federal Open Market Committee (FOMC) meeting and New Zealand Q4 GDP.
While checking the catalysts behind the moves, Reuters’ news that the American Senators seek trade waivers to better cheer the $1.9 trillion stimulus seems to have played its role. The reason is that the same will stretch boundaries for overseas firms that are restricted under the “Go American” drive.
Also on the positive side could be comments from US President Joe Biden, during the ABC interview, wherein he promised 100 million covid vaccine jabs to the US adults while also praising cross country tour with Vice President Kamala Harris and family to taut the fiscal relief.
Elsewhere, leading countries from the European Union (EU) raise bars for the AstraZeneca vaccine while North Korea warns the US over its ties with South Korea and military drills near the hermit kingdom.
It’s worth mentioning that the New Zealand Institute of Economic Research (NZIER) upgraded its economic forecasts during the latest release, published Monday. The same raises hopes of an upbeat print of New Zealand Q4 GDP, up for publishing on Thursday, versus 0.1% QoQ compared to 14% prior growth.
It should, however, be noted that the pre-Fed cautious sentiment and the reflation risk keep testing the market bulls and challenge Antipodeans.
Moving on, New Zealand’s Credit Card Spending data for December can offer immediate direction to the pair buyers but major attention will be given to the risk catalysts. Among them, stimulus and geopolitics will be the key as US Secretary of State Antony Blinken is on the Asian visit.
Technical analysis
A two-week-old falling trend line joins a 50-day SMA around 0.7215-20 to test the short-term buyers of the NZD/USD. However, the kiwi bears are less likely to enter unless witnessing a daily closing below 0.7098, comprising a 100-day SMA and monthly low.