- NZD/USD fades bounce off intraday lows during a sluggish Asian session.
- China reports downbeat Industrial Profits, Omicron woes escalate.
- US T-bond yields weigh on DXY, US retail sales jump in holiday season.
- Holidays in New Zealand, UK, Canada and Australia restrict market moves.
NZD/USD struggles to defend the 0.6800 threshold, sluggish near 0.6820 during early Monday. In addition to the Boxing Day holiday in New Zealand, mixed updates over Omicron and geopolitics also challenge the Kiwi pair traders during the final days of 2021.
Among the negatives were fears of the covid infections and inflation. On the contrary, the positives include hopes of US stimulus and firmer US retail sales, not to forget global studies showing lesser odds of hospitalization due to the South African COVID-19 variant, namely Omicron.
China reported 206 new COVID-19 cases for December 25 versus 140 the previous day while New Zealand reported 34 cases for the day. Further, Australia’s most populous state New South Wales (NSW) unfortunately reported a new high in coronavirus infections, to 6,394, while ABC news cites a 36% fall in tests. Elsewhere, the average number of new US coronavirus cases has risen 45% to 179,000 per day over the past week, per Reuters tally whereas the UK and France reported a fresh high of Covid-19 daily infections, respectively crossing 122,000 and 94,000 daily cases at the latest.
In addition to the jump in cases, which led to cancellations of over 4,500 flights during the Christmas weekend, escalating tensions between Russia and Ukraine also weigh on the sentiment. Furthermore, US Vice President Kamala Harris’ comments citing inflation fears also weigh on the sentiment, as well as the NZD/USD prices.
On the contrary, US VP Harris sounds optimistic about getting President Joe Biden’s Build Back Better (BBB) plan despite the latest challenges raised by Senator Joe Manchin. On the same line were the receding fears of Omicron, mainly due to positive developments concerning the virus cure and studies showing less hospitalization due to the South African COVID-19 variant, also keep the NZD/USD buyers hopeful.
Against this backdrop, the US 10-year Treasury yields remain pressured around 1.48% whereas the S&P 500 Futures print mild gains at the latest.
It’s worth noting that downbeat prints of China’s Industrial Profit for November, 38.2% YTD and 9.0% YoY versus 42.2% and 24.60% respectively, exert additional downside pressure on the NZD/USD prices.
Moving on, the US Dallas Fed Manufacturing Index for December, expected 13.2 versus 11.8 prior, may offer intermediate moves to the NZD/USD prices, in addition to the risk catalysts, during a likely sluggish session.
Technical analysis
Despite the latest pullback, NZD/USD pair’s successful run-up beyond 20-DMA, backed by bullish MACD and steady RSI, favors the Kiwi pair buyers. However, a daily close beyond a three-month-old horizontal area, near 0.6855-60, puts a cap on the short-term advances.
Should the NZD/USD bulls manage to cross the stated key hurdle, 100-DMA and early October swing high near 0.6990 will be in the spotlight. On the contrary, a downside break of the 20-DMA, around 0.6785, won’t hesitate to challenge the yearly low of 0.6701.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
AUD/USD: The hunt for the 0.7000 hurdle
AUD/USD quickly left behind Wednesday’s strong pullback and rose markedly past the 0.6900 barrier on Thursday, boosted by news of fresh stimulus in China as well as renewed weakness in the US Dollar.
EUR/USD refocuses its attention to 1.1200 and above
Rising appetite for the risk-associated assets, the offered stance in the Greenback and Chinese stimulus all contributed to the resurgence of the upside momentum in EUR/USD, which managed to retest the 1.1190 zone on Thursday.
Gold holding at higher ground at around $2,670
Gold breaks to new high of $2,673 on Thursday. Falling interest rates globally, intensifying geopolitical conflicts and heightened Fed easing bets are the main factors.
Bitcoin displays bullish signals amid supportive macroeconomic developments and growing institutional demand
Bitcoin (BTC) trades slightly up, around $64,000 on Thursday, following a rejection from the upper consolidation level of $64,700 the previous day. BTC’s price has been consolidating between $62,000 and $64,700 for the past week.
RBA widely expected to keep key interest rate unchanged amid persisting price pressures
The Reserve Bank of Australia is likely to continue bucking the trend adopted by major central banks of the dovish policy pivot, opting to maintain the policy for the seventh consecutive meeting on Tuesday.
Five best Forex brokers in 2024
VERIFIED Choosing the best Forex broker in 2024 requires careful consideration of certain essential factors. With the wide array of options available, it is crucial to find a broker that aligns with your trading style, experience level, and financial goals.