- NZD/USD remains on the front-foot for second consecutive day.
- S&P 500 Futures follow Wall Street’s mild gains despite challenges to risks from the US.
- A light calendar keeps US-China headlines, virus updates on the driver’s seat.
NZD/USD takes the bids near 0.6490 during the early Asian session on Tuesday. On Monday, the kiwi pair registered heaviest gains in over a month as risk-tone recovered amid hopes of receding US-China tension and a bit of weakness in the coronavirus (COVID-19) figures from China and Beijing. Additionally supporting the mood could be the updates on the $1.00 trillion infrastructure spending plan from the US.
While cheering a bit softer virus figures from the Asian major, global traders ignored the sustained rise in the American statistics concerning the pandemic. The reason for the optimism could be traced from US President Donald Trump’s step back from sanctions on Chinese diplomats involved in the Xinjiang issue. Also, the US House of Representatives Democrats’ upgrade to the initially estimated $1 trillion aids with a $1.5 trillion stimulus offered extra strength to the risk-on mood.
However, the recent headlines haven’t been market positive as they rekindle the Sino-American tension while also citing the virus woes. With the US adding more Chinese media into the list placed near the foreign embassies, coupled with Treasury Secretary Steve Mnuchin’s signal of decoupling from Beijing, the market’s trade optimism gets fresh challenges.
Further to weigh on the risk-tone, the World Bank President David R. Malpass said that the Coronavirus pandemic and economic fallout have caused ‘very serious, long-lasting setback’.
On the positive side, Australia’s upbeat PMI data from the Commonwealth Bank might have favored the kiwi pair’s latest rise.
Even so, S&P 500 Futures keep the previous day’s upbeat performance on the cards while rising 0.40% to 3,123 as we write. It’s worth mentioning that Wall Street benchmarks joined the US 10-year Treasury yields to post a positive start of the week the previous day.
Considering the lack of major data on the economic calendar, the pair traders might keep eyes on the qualitative catalysts for the immediate direction.
Technical analysis
The pair’s ability to cross the falling trend line from June 10 enables it to challenge last Tuesday’s top near 0.6510. Though, the pair’s further upside will help the bulls to aim for the monthly peak of 0.6585. Alternatively, the resistance-turned-support and 21-day SMA offers strong immediate support near 0.6410/05 to the pair traders.
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