NZD/USD stays depressed below 0.7200, seeks fresh clues amid off in China
- NZD/USD fades bounce off one-week low tested last Friday.
- Market sentiment sours amid doubts over global recovery from the pandemic and on the US stimulus.
- Off in China, light calendar at home trouble momentum traders.
NZD/USD takes offers around 0.7170 while fading the late Friday’s corrective pullback during early Monday’s Asian trading session. The kiwi pair dropped the most in a month the previous day as the US dollar benefited from risk-off mood and upbeat data at home. Amid an absence of major positives during the weekend, not to forget a light calendar and holiday in China, the kiwi pair extends the latest downtrend.
Despite faster vaccinations in the West and recent recovery in the global economics, not only from New Zealand, risk appetite remains weak amid uncertainty over the future economic recovery. The reason could be spotted from virus resurgence in Asia and uneven jabbing in the developed countries. It’s worth mentioning that the recent chatters suggesting one jab isn’t enough to curb the virus spread even for a short-term, which is the most governments think, seem to weigh on the sentiment.
Elsewhere, US President Joe Biden’s stimulus packages are in limbo as Republicans don’t want to back the tax hike, not to forget the rejection to fund the entire $1.8 trillion “American Families Plan”. Even so, US Treasury Secretary Janet Yellen recently said, during an NBC interview, “it would be ‘safest’ to include the means for President Biden's infrastructure plan to fund itself.”
Amid these plays, S&P 500 Futures print 0.13% intraday gains despite Friday’s downbeat performance of Wall Street.
Moving on, an off in China and a light calendar in New Zealand keeps NZD/USD traders searching for Aussie catalysts and risk updates for fresh impulse in Asia. It should, however, be noted that the pair marked the biggest monthly gain of 2021 in April and hence further downside can’t be ruled out.
Technical analysis
Not only a monthly support line and 100-day SMA, near 0.7165, but a confluence of 21-day and 50-day SMA around 0.7145 also tests NZD/USD sellers.