- NZD/USD fails to carry the previous two-day gains forward.
- Risk-tone heavies, RBNZ Assistant Governor shows readiness to increase the size of the QE.
- GDT Price Index offered positive surprise but coronavirus recently weighed on the trading sentiment.
Following the RBNZ’s sustained favor for increasing the size of the QE, NZD/USD drops to the intraday low of 0.5960 amid Wednesday’s Asian session. With that, the pair defies the previous two-day winning streak amid recently cautious trade sentiment.
The RBNZ Assistant Governor Christian Hawksby recently crossed wires while showing openness to increase the size of the Quantitative Easing (QE) as citing a rapidly evolving situation.
Elsewhere, the latest swing in the coronavirus (COVID-19) numbers from global hotspots, namely the US, Europe and the UK, as well as virus-led emergencies in Japan, also weighed on the market’s risk-tone off-late.
That said, US President Donald Trump struck a cautiously optimistic tone during his Tuesday’s Coronavirus Task Force Briefings but failed to convince the risk-takers.
While portraying the risk-tone, the US 10-year Treasury yields drop two basis points (bps) to 0.717% whereas Japan’s NIKKEI begins the day on the negative side.
It should also be noted that New Zealand’s GDT Price Index earlier rose beyond -3.9% prior contraction to +1.2% with a 2.1% gain in Whole Milk Powder (WMP) prices.
Given the lack of major data, the kiwi pair will take clues from virus updates while any surprise announcements from the US and/or New Zealand could keep traders busy.
Technical analysis
Unless declining back below 0.5930, comprising 21-day SMA, buyers can’t lose hope to regain 0.6000 and confront the March 27 high near 0.6070 during the extra rise.
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