Bears step in below 0.57 handle, US dollar marks up fresh highs
Forex News

NZD/USD pulls back from weekly high to sub-0.6050 area amid risk reset

  • NZD/USD snaps three-day winning streak.
  • New Zealand PM Ardern claims the elimination of coronavirus while easing lockdown restrictions to level 3.
  • US President Trump strikes upbeat tone, New South Wales Premier announces leeway to virus-led restrictions.

Despite the recovery in New Zealand’s coronavirus (COVID-19) status, NZD/USD drops to 0.6030 amid the early Asian session on Tuesday. With that, the Kiwi pair defies the previous three-day recovery moves from 0.5910.

As per the CNN news, New Zealand PM Jacinda Ardern said that the coronavirus was “currently” eliminated but that the country needed to remain alert and could still expect to continue to see new cases.

“The country moved to level 3 at 11.59 PM on Monday, easing some of the restrictions of the level-4 living of the past four-and-a-half weeks – including another 400,000 Kiwis returning to work and the lifting of fast-food restrictions,” said the New Zealand Herald.

Also on the positive side could be recoveries in the virus status at the largest customer Australia. The latest easing of lockdown restrictions in New South Wales suggest that Australia is also joining New Zealand as far as the virus status is concerned.

On the other hand, US President Donald Trump struck an upbeat tone during his first coronavirus task force briefings while saying that all parts of the country are either in good shape or in all cases getting better in terms of coronavirus.

The markets cheered nearness to easing lockdown restrictions during the early-week with the broad US dollar weakness and upbeat performances by the commodity-linked lockdown. However, the latest pullback in the Kiwi seems to have taken clues from US President Trump’s comments.

That said, the risk-tone sentiment also seems to pair the previous optimism with the S&P 500 Futures declining 0.06% to 2,867.40 by the press time.

Looking forward, a lack of major data/events in Asia keeps the Kiwi traders directed towards the virus updates for fresh impulse.

Technical analysis

Unless breaking the 75-pip area between 50-day and 21-day SMA, respectively around 0.6070 and 0.5995, the NZD/USD prices are less likely to offer any clear signal.

 

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