NZD/USD flirts with 0.6700, in search of more clues
- NZD/USD again bounces off 0.6666 to aim for 0.7000 for the fourth time.
- New Zealand Total Filled Jobs for June rose 2,053 to 2.2 million.
- Antipodeans cheer US dollar weakness amid a light calendar.
- Virus updates, stimulus news will be in the spotlight.
NZD/USD picks up the bids around 0.6685-90 during the early Asian session on Tuesday. The kiwi pair marked the highest closing since the early-January 2020 regardless of its inability to refresh the yearly high of 0.6741, need to mention about the inability to cross 0.6700 threshold.
Bulls pay a little heed to upbeat jobs data…
New Zealand’s Total Filled Jobs for June extended the previous month’s recovery move while adding 2,053 figures to the previous month’s 2,194,286 number for May. Though, NZD/USD shrugs off the positive catalysts while marking another failure to cross 0.6700 level with an intraday high of 0.6692.
The reason could be traced from the market’s failure to extend the previous risk-on mood amid a lack of major catalysts. Also warning the bulls are the recent comments from the US health official Anthony Fauci suggesting cautious optimism for Moderna coronavirus (COVID-19) vaccine. Furthermore, North Korean leader Kim Jong-Un’s clear favor for nuclear arsenal adds to fears of a fresh US-North Korea tussle.
The kiwi buyers kick-started the week on a positive side as the US dollar refreshed two-year low and commodities managed to keep the bulls happy for one more day. In doing so, the quote showed a little case for increases in global virus cases.
A lack of agreement over the much-awaited fiscal package and sustained increase in the pandemic numbers from the US could be cited as the major reasons behind the greenback’s weakness. Additionally, mixed data and fears of negative rates and sharp economic contraction also weigh on the US currency.
Amid all these catalysts, Wall Street benchmarks and the US 10-year Treasury yields managed to post mild gains on Monday whereas S&P 500 Futures print 0.10% profits to 3,235 as we write.
Looking forward, traders will have to follow virus updates and news relating to the US fiscal package for near-term direction.
Technical analysis
Higher high formation joins the pair’s ability to stay beyond 0.6600, July 09 high, to keep the bulls hopeful of a break above 0.6700. The same will escalate the pair’s north-run towards the December 2019 peak of 0.6756. Meanwhile, a downside break under 0.6600 will have June month’s top near 0.6585 and 21-day SMA level of 0.6573 as validation points for further declines.