NZD/USD stays near 11-week high after RBNZ’s Financial Stability Report

• NZD/USD bulls catch a breath after stepping back from 0.6229.
• RBNZ’s bi-annual Financial Stability Report spread optimism.
• The return of the full markets sees economic recovery, cheers global efforts to find coronavirus (COVID-19) cure.
• Fresh calls of sanctions on China could challenge risk-on sentiment amid a light calendar.

NZD/USD seesaws around 0.6200 at the start of Wednesday’s Asian session. While Tuesday’s risk-on sentiment propelled the pair to 11-week high, around 0.6230, the RBNZ’s bi-annual Financial Stability Report seems to fail in providing a major push to the kiwi pair despite being optimistic.

RBNZ says financial system is in a solid position…

In its first bi-annual position, the RBNZ spread optimism while expecting the financial system to benefit from the post-pandemic economic recovery. The report also says the financial system is in a solid position to both weather the significant economic impact caused by the COVID-19.

Read More: RBNZ Financial Stability Report: In a solid position to both weather the significant economic impact caused by the COVID-19

The risk-on sentiment at full steam…

With the rising calls of major global economies easing lockdown restrictions and trying their back to restore economic cycle, markets turn optimistic for the policymakers’ efforts. Also adding to the upbeat trading sentiment is increasing efforts by the global scientist pharmacies to find the cure of the pandemic, with the Novavax being the 12^th vaccine being tested.

In doing so, traders seem to pay a little heed to the speculations that the US-China trade deal is of a no importance for US President Donald Trump, as per the White House Adviser Larry Kudlow.

As a result, Wall Street portrayed a sea of green with the S&P 500 crossing 3,000 mark for the first time since March by the end of the US session on Tuesday.

Although the present trading sentiment is optimistic, US President Donald Trump hasn’t directly attacked China’s stand for Hong Kong. If the Republican leader chooses to do so, the risk-on mood might fade amid a light calendar in Asia, which in turn could trigger a pullback of the NZD/USD pair.

Technical analysis

In addition to providing a sustained break of a 100-day EMA level of 0.6170, the kiwi pair needs to print a successful break above 0.6200 to register its capacity in challenging the 200-day EMA around 0.6300. Meanwhile, 50-day EMA near 0.6085 can offer a rest to the bears during the pair drop below 0.6170.