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  • NZD/USD extends recovery moves from 0.6547 after upbeat New Zealand data.
  • NZIER Business Confidence for Q2 slipped -63% versus -70% prior.
  • Market optimism keeps kiwi on the winners’ list, recent economics add to the momentum strength.
  • A lack of major data/events pushes the pair traders to look for virus updates, China headlines for fresh impulse.

NZD/USD extends recovery moves from 0.6547 to 0.6557 amid the early Asian session on Tuesday. The pair recently benefited from the second quarter (Q2) readings of the New Zealand Institute of Economic Research (NZIER) Business Confidence. This helps the quote to extend the previous six-day winning streak while taking rounds to a one-month top.

New Zealand’s NZIER Business Confidence (QoQ) for Q2 recovered from the previous quarter’s -70% to -63%. Following the news, NZD/USD stretched its pullback from the intraday low. In doing so, the kiwi pair keeps the previous day’s optimism backed by the market’s risk-on mood.

Despite witnessing downbeat prints of New Zealand’s June month ANZ Commodity Price Index, to -0.7% versus upwardly revised 1.1%, the quote began the week on a front foot. The reason could be traced from the global optimism amid hopes of a coronavirus (COVID-19) vaccine and further stimulus from developed economies. The Global Times (GT) recently announced that the Chinese COVID-19 vaccine approved to enter the Phase III clinical trial in Brazil. It’s worth mentioning that the upbeat print of the US ISM Non-Manufacturing PMI, 57.1 versus 50.1 expected, could be considered as an extra point to propel the risk-on mood.

On the other hand, the Sino-American tension and worsening virus conditions in the US, as well as the largest customer Australia, question the bulls. The military drills in the South China Sea pushed the South China Morning Post (SCMP) to say that Beijing ‘is ready to counter the US’ as both navies hold drills in the South China Sea. In regards to the virus, the latest update suggests that the US cases marked a 2.0% daily rise on July 06 versus the previous seven-day average of 1.8%.

While portraying the market sentiment, Wall Street benchmarks extended their north-run by the end of Monday, with Nasdaq rising to the record high. Additionally, the US 10-year treasury yields inch close to 0.70% whereas S&P 500 Futures stay mostly flat around 3,167 as we write.

Considering the lack of major data/events on the calendar, the pair traders will keep eyes on the RBA interest rate decision and the pandemic update for immediate direction. Additionally, the Sino-American tension and trade news might offer an extra light for the near-term trade decision. While the RBA isn’t expected to alter the current monetary policy, the NZD/USD pair bulls will seek praise for the recent surge in the Australian dollar for further rise.

Technical analysis

The NZD/USD pair buyers are all set to attack the June month high near 0.6585 with eyes on 0.7000 threshold. Though, the pair’s declines below June 23 high near 0.6530 could trigger a fresh pullback towards 0.6500 round-figures.