- NZD/USD remains mildly positive amid hopes of global easing.
- Aussie data, RBA will be the keys to watch amid a lack of domestic catalysts.
- Coronavirus keeps Kiwi buyers doubtful.
NZD/USD registers small gains while trading around 0.6250 amid the initial Asian session on Tuesday. That said, the pair successfully bounced off the lowest since August 2015 during the previous day amid expectations of global easing due to coronavirus (COVID-19). Even so, a lack of domestic catalysts and nearness to the monetary policy decision from the key customer Australia pushes the Kiwi traders towards being cautious.
While fears of widespread coronavirus taking a toll on the global economy continue to prevail, risk-off paddled back on Monday as concerns grew that G7 policymakers will devise monetary/fiscal help to counter the pandemic.
The news got further strength from the US President Donald Trump’s recent push as well as the ECB President’s refrain to respect the fellow policymakers’ earlier signals of no easing.
It’s worth mentioning that COVID-19 updates from the US and Italy have been fearsome off-late while the UK PM shows readiness to confront the potential economic downside due to the deadly virus.
Even so, the market’s trade sentiment remains on the recovery mode with the Wall Street benchmarks flashing more than 4.0% gains each at the end of Monday’s session.
Looking forward, the RBA’s interest rate decision will be the key to watch as traders are divided over the outcome with most expecting a bearish halt in contrast to the top-tier analysts’ changed call of a rate cut. Should there be a surprise rate cut from the RBA, the ANZ’s call of the RBNZ’s 0.50% rate cut in March can’t be ruled out, which in turn should start filling in further weakness into the Kiwi pairs.
Elsewhere, the Fedspeak will also be closely observed considering the recently hiked expectations of a global easing wave. The G7 monetary policy announcement will be keenly awaited with the latest headlines suggesting the US Treasury Secretary Steve Mnuchin and the Fed Chair Jerome Powell will lead the call.
Technical Analysis
A two-week-old falling trend line around 0.6290 acts as the immediate upside barrier ahead of November 2019 low near 0.6315. Alternatively, lows marked during Friday and October 2019 offer important support around 0.6200-0.6190 area.
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