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  • NZD/USD fails to keep the upside break of Monday’s top, recedes from 0.6494.
  • Risk-tone remains mildly positive despite worries concerning the coronavirus and US-China.
  • Aussie trade balance, risk catalysts could offer near-term direction ahead of the US NFP.

NZD/USD declines to 0.6478 during the initial Asian session on Thursday. In doing so, the kiwi pair extends pullback moves from the one-week top while also questioning the four-day winning streak that bulls cheered earlier.

Upbeat prints of New Zealand Building Permits and China Caixin Manufacturing PMI gained additional support from welcome global activity numbers the previous day. Also supporting the positive performance was the minutes statement of the Federal Reserve’s latest meeting. The statement showed that US monetary policymakers stay ready to act but don’t feel the push towards the negative interest rates.

Market sentiment also cheered the better than forecast readings of most global statistics. In doing so, the trades ignored surging cases in the US that recently called for strict restrictions in California. The reason could be traced from the news suggesting a good success rate of the coronavirus (COVID-19) vaccine, as per the clinical trials, developed by Pfizer and BioNTech. Furthermore, the US House passed a $1.5 trillion infrastructure plan and strengthened hopes of further stimulus by the world’s largest economy.

Alternatively, the US-China tussle continues to get bitter following the passage of Hong Kong security law. The Trump administration shunned Hong Kong’s special trading status before US Secretary of State Mike Pompeo pushed for the nation’s freedom. On the other hand, China criticized American actions while also asking for details from the US media operating in their land.

Amid all these plays, S&P 500 Futures remain mildly bid near 3,100 after Wall Street flashed mixed signals. Additionally, the US 10-year Treasury yields extend their recovery moves towards 0.70%.

An absence of data at home highlights the key risk catalysts, like Sino-American tension and virus woes, as the main directives to follow. However, Australia’s May month trade figures and the US employment figures for June will be the keys to watch for additional guidance. Considering the upbeat forecasts for both the economic indicators, coupled with a little negative reaction to downbeat news, odds are increasing for the quote’s additional upside.

Technical analysis

A three-week-old falling trend line, currently around 0.6500, holds the key to pair’s further upside towards June 23 top near 0.6530/35. Alternatively, the pair’s declines below the 21-day SMA level of 0.6460 could drag it to June 22 low of 0.6383.