NZD/USD: Buyers keep 0.6600 on radars as trading sentiment stays upbeat
- NZD/USD remains positive above 0.6550, the highest since late-January.
- Broad US dollar weakness, risk-on sentiment keeps the bulls on the driver’s seat.
- New Zealand’s Alert Level 01 also favors the optimists.
- New Zealand ANZ Truckometer for Heavy Traffic Index rose 86.9% MoM in May versus -45% prior.
NZD/USD takes the bids near 0.6560, the highest since January 27, amid the early Tuesday morning in Asia. The kiwi pair recently benefited from New Zealand’s ANZ Truckometer data for May while extending the previous day’s run-up to a multi-day top.
As per the Australia and New Zealand Banking Group’s (ANZ) Truckometer update for May, “the Light Traffic Index recovered more than half of its April fall, but it was still 37% lower than last May for the month as a whole. The Heavy Traffic bounced more, and is 7.8% lower than May 2019.”
Previously, the quote cheered the market’s hope of early recovery from the coronavirus (COVID-19)-led economic loss. The reason could be traced from Friday’s upbeat US employment data as well as weekend news from China suggesting record-high trade surplus.
Also contributing to the pair’s strength could be the New Zealand government’s removal of all pandemic related restrictions except for the border closure on Monday.
Additionally, Wall Street’s stellar performance also pushed the traders off greenback and favored the Antipodeans.
Even so, the US-China tussle remains active with the US policymakers nearing another bill to punish diplomats from Beijing for human rights violations.
Looking forward, a light calendar will keep qualitative catalysts on the driver’s seat whereas the Sino-American tension might offer scope for the pair’s pullback during the Asian session.
Technical analysis
While overbought RSI conditions signal the pair’s pullback to February month’s high near 0.6500, the bears are less likely to gain powers unless witnessing a daily closing below a 200-day SMA level of 0.6320. Alternatively, the 0.6600 threshold offers immediate resistance to the pair.