Search ForexCrunch
  • NZD/USD snaps three-day uptrend, refreshes intraday low of late.
  • Market sentiment dwindles amid mixed clues, quiet trading.
  • China’s commodity crackdown, recently soured relations with NZ can back the sellers.
  • RBNZ’s Orr reiterates MPS optimism but shows readiness to increase stimulus in case of negative shock.

NZD/USD takes offers around 0.7265, down 0.21% while refreshing intraday low, during early Thursday. In doing so, the kiwi pair trims the previous day’s solid gains as mild risk-off mood tests RBNZ optimism amid a quiet session in Asia.

Given the firmer tone of the US 10-year Treasury yields, the US dollar index (DXY) stretched the recovery moves from early January lows, which in turn exerts downside pressure on the NZD/USD prices.

Behind the moves could be the chatters surrounding China’s crackdown on commodity trading and doubts over future relations between Beijing and Auckland. The dragon nation has been trying to tame the commodity rally, which in turn could negatively affect the antipodeans. Also, New Zealand’s recently closed proximity to Australia and the West may push it backward in the Chinese list of friends.

On the contrary, US President Joe Biden showed readiness to push for infrastructure spending talks and the US Food and Drug Administration (FDA) approved an antibody-drug for emergency use. Furthermore, the Federal Reserve (Fed) official’s ability to convince markets of no tapering and downbeat US data also seem to play their role in favoring the bond bears of late. It’s worth mentioning that the Reserve Bank of New Zealand (RBNZ) Governor Adrian Orr reiterated the previous day’s bullish bias and readiness to rake hike in late 2022. However, fears of extended easy money, in case of negative shocks, couldn’t be ruled out.

Amid these plays, S&P 500 Futures drop 0.10% and the stocks in Asia-Pacific also drops. More notable is the 1.70% downside of New Zealand’s stock index NZX 50.

Given the light calendar ahead of the US session, NZD/USD traders may keep their eyes on the US Treasury yields for fresh impulse. During the US session, Durable Goods Orders will be the key ahead of Friday’s Core Personal Consumer Expenditure (PCE) Price Index data.

Read:  US Durable Goods Orders April Preview:  Jobs should equal spending

Technical analysis

Failures to cross January tops near 0.7315 drag NZD/USD towards a confluence of 10-day and 21-dauy SMA around 0.7220.