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  • NZD/USD kick-starts October on a positive note, prints five-day gains while rising beyond 0.6600.
  • Market sentiment remains positive amid hopes of further stimulus from the US, Japan.
  • China’s absence, lack of major data restrict trading volatility.

Following its recent run-up to the fresh high since September 23, NZD/USD seesaws around 0.6625-30 during the early Asian session trading on Thursday. The kiwi pair initially cheered news suggesting additional money supply from America and Japan before bulls paused amid a lack of major catalysts.

US stimulus won’t be $2.2 trillion…

The latest comments from US Treasury Secretary Steve Mnuchin suggested that the House Republicans will not back the Democratic demand for a $2.2 trillion stimulus package. The same has been a sticking point for the Congress that postponed decision-making to Thursday. Even so, the passage of the stopgap funding and no major negative statements from the policymakers keeps the markets hopeful for the much-awaited aid package.

Also fueling the expectations of further monetary supply is news from Japan’s Nikkei newspaper that recently hinted at the further stimulus.

Elsewhere, the coronavirus (COVID-19) risk is rising while the global pharmaceutical companies are rushing towards the pandemic’s cure. Furthermore, the risk of no-deal Brexit and political uncertainty in the US, in contrast to a much softer stand that New Zealand’s, also challenge the risk-on mood.

Even so, S&P 500 Futures stay 0.20% up to 3,360 while the US 10-year Treasury yields also remain positive near 0.68%.

Given the one-week-long off in China, coupled with no major New Zealand data in the current week, NZD/USD moves are likely to take clues from the US dollar performance. As a result, Friday’s headlines employment statistics for September become crucial to watch for near-term direction.

Technical analysis

Unless the pair slips below the early-September low of 0.6601, buyers are likely to aim for the 50-day SMA level surrounding 0.6640.