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  • NZD/USD takes rounds to one-month top, recently taking bids.
  • US dollar weakness favored bulls earlier, S&P 500 Futures favor the run-up off-late.
  • RBA minutes, PBOC rate decision and risk headlines should be watched for fresh impulse.

NZD/USD refreshes intraday high to 0.7190, up 0.08% on a day, amid Tuesday’s Asian session. In doing so, the kiwi pair stays firm around the highest since March 18 after rising the most in a week the previous day.

US dollar weakness could be traced to the quote’s notable rise. The greenback dropped the most in 2021 on Monday as traders rushed back towards Treasuries. That said, the US 10-year Treasury yields rose 3.2 basis points (bps) to 1.61% at the week’s start.

It should, however, be noted that the Wall Street benchmarks failed to keep Friday’s gains as challenges to technology shares and a deadlock over US President Joe Biden’s $2.25 trillion infrastructure spending plan disappointed equity bulls.

Additionally, the coronavirus (COVID-19) fears in Europe and Asia join the geopolitical fears concerning China and Russia also weigh on the market sentiment as well as on the NZD/USD prices.

However, the recent chatters, backed by Reuters, suggested US President Joe Biden’s readiness to compromise on the spending plan join vaccine optimism in American to favor the risk-on mood amid a light calendar.

It’s worth mentioning that the Australia-New Zealand border opening also contributed to the pair’s rise but cautious comments by PM Jacinda Ardern seem to test the bulls.

Looking forward, RBA minutes may keep the bulls hopeful with its anticipated economic optimism. Further, the People’s Bank of China (PBOC) is also expected to keep the monetary policy unchanged but may convey upbeat comments due to the latest positive numbers from home, which in turn may help NZD/USD to stay firmer. Though, challenges to the risk may trigger the US dollar’s corrective pullback and tame the kiwi pair’s gains.

Technical analysis

Unless crossing the 0.7200 threshold, comprising a seven-week-old falling resistance line, NZD/USD may not avoid pullback towards a 50-day EMA level of 0.7120.

 

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