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  • NZD/USD attempts recovery from 0.6689 after witnessing the heaviest weekly losses in previous four.
  • Election campaign in New Zealand begins with the most favors for current PM Ardern.
  • NZ travelers returning from India recently added to the domestic virus numbers.
  • US-China tussle, hopes of RBNZ’s bearish tone keep the bulls checked.

NZD/USD picks up bids near 0.6695 during the early Asian trading on Tuesday. The kiwi pair recently gained as S&P 500 Futures carries the previous day’s pullback from late-August lows.

Also adding to the pair’s upbeat performance could be the start of the general election campaign in New Zealand (NZ) that keeps the current Prime Minister (PM) Jacinda Ardern on the top. Even so, fears of the coronavirus (COVID-19) resurgence and the Sino-American tension exert downside pressure on the quote.

Bulls need a strong push to retake control…

Be it PM Ardern’s surprise twitch on the television or push for the Maori New Year holiday, everything shows that the current liberal Labour Party is likely to be re-elected after October 17 election. The PM also gains accolades for her work during the COVID-19 outbreak. Though, the recent surge in the virus numbers at home, mainly due to travelers’ return from India, questions the government’s efforts.

On the other hand, US President Donald Trump is likely losing against the Democratic candidate Joe Biden mostly because American turns out to have the world’s biggest numbers of virus-infected people. Even so, the US dollar index (DXY) recovers for the fifth day in a row after marking the 28-month low as global markets prefer the greenback amid uncertain times. Also favoring the US currency could be the recently positive economics from the US.

Elsewhere, the Beijing-Washington tension escalates after China’s Foreign Minister Spokesperson Zhao Lijian ) shrugged off the US State Department’s allegations that Beijing is putting visa restrictions for American media on their land. The world’s top two economies earlier jostled over the news suggesting the Trump administration’s readiness to blacklist China-based company.

Against this backdrop, market sentiment remains positive after European shares surge on expectations of further easing from the European Central Bank (ECB). While portraying the mood, the S&P 500 Futures rise 0.70% to 3,441 by the press time.

Moving on, the economic calendar in Asia is mostly quiet and can push traders to watch for the US traders’ market reaction after the extended weekend.

Technical analysis

Unless bouncing off July 31 top near 0.6715, the quote is expected to remain heavy towards an ascending trend line from May 15, at 0.6585 now.

 

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