NZD/USD remains on the front foot above 0.6000 after New Zealand trade figures
- NZD/USD cheers upbeat monthly Trade Balance, Export and Imports while ignoring weaker than expected YoY figures.
- Antipodeans benefit from increasing odds of the economic restart, downbeat US dollar.
- A heavy economic docket ahead, virus updates will also be the key.
NZD/USD takes the bids to 0.6060, up 0.10 on a day, after New Zealand’s trade numbers flashed mixed signals during the early Asian session on Wednesday.
New Zealand’s March month trade figures suggest the headline Trade Balance grew from a revised down $531M to $672M on MoM versus $-3.46B actual and $-3.3B prior on YoY. Further details indicate the Imports rose from $4.34B (revised) to $5.14B whereas Exports also rose from $4.87B to $5.81B. Following the data, the Kiwi pair remains mostly upbeat while carrying the previous positive momentum.
Read: NZ Trade Balance: A monthly trade surplus of NZ$672.00 million in March
The quote has recently been cheering New Zealand’s (NZ) recovery from the coronavirus (COVID-19). The NZ PM Jacinda Ardern pared the lockdown restrictions from level 4 to level three on Tuesday but urged people to stay at home.
Other than the optimism at home, expectations surrounding the US economic restart and broad US dollar weakness, mainly due to the downbeat data and cautious sentiment ahead of GDP/FOMC, also help the pair.
However, the recent tug-of-war between the US and China, due to the Trump administration’s allegations that the dragon nation’s irresponsible behaviour pushed the global economy into the pandemic, seem to cap the commodity-linked currencies’ gains.
Markets risk-tone sentiment seems to have improved recently with the S&P 500 Futures flashing mild gains of 0.10% to 2,863 by the press time. It should be noted that Wall Street and the US treasury yields failed to portray the optimism the previous day.
Having witnessed initial market reaction to the NZ data, the pair traders may wait for the Aussie Consumer Price Index (CPI) figures ahead of the busy US economic docket for further direction. While data from the major customer Australia are less likely to please the buyers, US statistics can keep the greenback pressured and might help the bulls. Additionally, pandemic news and updates concerning the US-China tussle should also be observed for fresh impetus.
Technical analysis
Despite flashing a five-day winning streak, the Kiwi pair still struggles to clear 50-day SMA, currently near 0.6070, which holds the key to the quote’s run-up towards the monthly top surrounding 0.6130. On the contrary, the weekly support line and 21-day SMA can restrict the pairs’ near-term declines near 0.6015 and 0.6000 respectively.