- A combination of factors assisted the NZD/USD to gain traction for the fourth straight session.
- Positive news about the development of a COVID-19 vaccine undermined the safe-haven USD.
- Worries about a surge in coronavirus cases globally might cap gains ahead of the US jobs report.
The NZD/USD pair shot to fresh weekly tops during the early European session, with bulls now looking to extend the momentum further beyond the key 0.6500 psychological mark.
The pair built on this week’s goodish bounce from the 0.6385-80 horizontal support and gained traction for the fourth straight session on Thursday – also marking its fifth day of a positive move in the previous six. The move-up was supported by a combination of factors, including the upbeat market mood and the prevalent US dollar selling bias.
The global risk sentiment remained well supported by the positive news about the development of a vaccine for the highly contagious COVID-19. It is worth reporting that Biopharmaceutical New Technologies (BioNTech) announced on Wednesday that the COVID-19 vaccine – co-developed with the US pharmaceutical giant Pfizer – has shown potential and triggered a strong immune response in the early stage of human trials.
This comes on the back of stronger economic data from the US and Europe, which revived hopes for a sharp V-shaped global economic recovery. This, in turn, undermined the US dollar’s relative safe-haven status and drove flows towards the perceived riskier kiwi. However, worries about the ever-rising number of coronavirus cases globally might hold held investors from aggressive bullish bet and cap any strong gains for the NZD/USD pair.
Moving ahead, the focus now shifts to Thursday’s release of the closely watched US monthly jobs report, due later during the early North American session. The headline NFP is expected to show that the US economy created 3 million jobs in June and the unemployment rate is anticipated to have edged lower to 12.3% from 13.3% previous.
Technical levels to watch
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