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  • NZD/USD extends recoveries from 0.6570 to re-try breaking June month top for the third time in a week.
  • New Zealand’s ANZ Truckometer data suggest overall traffic is nearly back to year-ago levels.
  • Bulls cheer broad rally in Antipodeans amid greenback weakness and a surge in commodities.
  • China’s June month inflation numbers, Aussie housing figures and US Jobless Claims to join qualitative catalysts for immediate direction.

NZD/USD remains firm around 0.6575 during the early Thursday morning in Asia. In doing so, the kiwi pair defies the second reversal from 0.6581 while taking a U-turn from 0.6570 before a few minutes. While the pair’s latest up-move could be attributed to New Zealand’s ANZ Truckometer data from June, Wednesday’s upbeat performance might be compared with the US dollar weakness and gains in equities and commodities.

ANZ Truckometer data for June mentions the rise of 14.5% in Heavy Traffic whereas Light Traffic Index surged 28%. In addition to terming it back-to-normal conditions, the Australia and New Zealand Banking Group’s (ANZ) report also states, “Light traffic on the weekend remains the weakest type of travel compared to a year ago, despite calls to embark on domestic tourist adventures.”

The US dollar index (DXY) dropped to the June 23 low before settling around 96.50 by the end of Wednesday. The greenback gauge might have taken clues from the surge in the coronavirus (COVID-19) numbers that rose past-3.0 million. The latest updates from the Texas Health Department suggest new cases rise by 9,979 to 220,564 on Wednesday while marking the biggest daily increase since pandemic started. It should also be noted that the US health officials are also a little optimistic about the vaccine, likely to be rolled out by the year-end, which in turn exerts additional pressure on the US currency.

Other than the pandemic woes, the US-China tussle also drags the USD. News that the American diplomats, not including President Donald Trump, are weighing in a proposal to undermine the Hong Kong dollar peg offered a major blow to the market’s worries concerning the Sino-American tension. Also signaling the intensified relations among the world’s top two economies are the latest hardships introduced by US Secretary of State Mike Pompeo over the Chinese diplomats seeking visas.

It’s worth mentioning that the surge in the virus cases in the largest customer Australia should have also weighed down the pair. Though, the US dollar weakness supersedes everything.

While portraying the market mood, Wall Street marked a mildly positive closing on Wednesday whereas the US 10-year Treasury yields gained to 0.66%. Further, S&P 500 Futures also follow the footsteps of American equities while taking rounds to 3,167 as we write.

With China’s June month inflation numbers up for publishing, kiwi traders are less likely to attempt any major moves, while keep attacking 0.6580/85 zone, ahead of the data. As per market consensus, the headline Consumer Price Index (CPI) data from 2.4% to 2.5% YoY whereas the Producer Price Index (PPI) is also expected to bounce off -3.7% to -3.2% on a yearly basis. Following that, Australia’s Home Loans and Investment Lending for Homes are also likely to portray recoveries from the lockdown period whereas likely weakness in the US Jobless Claims might help the kiwi pair to overcome the key upside barrier.

Technical analysis

Considering the repeated failure to cross 0.6580/85 resistance area, coupled with overbought RSI conditions, NZD/USD bulls might not risk entries at the moment. On the contrary, the pair’s downside break of June 23 top near 0.6530 could renew selling pressure towards 0.6500.