- NZD/USD directs the previous two days’ upward trajectory towards 0.6600.
- S&P 500 Futures prints a four-day winning streak after Monday’s biggest surge in three weeks.
- Hopes of breaking the US stimulus deadlock, virus vaccine gain momentum, a light calendar probes the bulls.
- The first debate of the American Presidential Election becomes important, comments from Fed speakers will also be followed closely.
NZD/USD seesaws around 0.6560, up 0.08% intraday, during the early Asian session on Tuesday. The kiwi pair benefited from the broad US dollar weakness and risk recovery the previous day. Though, a lack of major data/events keeps the bulls chained ahead of crucial catalysts.
US Congress progresses towards COVID-19 aid package talks…
With the House Democrats’ readiness to compromise on the earlier demands concerning the coronavirus (COVID-19) stimulus package, the halt to the American policymakers’ talks for the much-awaited aid is likely to be broken soon. The same joins the line of the European Central Bank (ECB) and British diplomats to keep the market’s risk-tone sentiment positive.
Also favoring the NZD/USD bulls are expectations that the COVID-19 cure will soon be rolled out. Additionally, the Fed policymakers’ dovish tone, a contrast to the RBNZ counterparts’ absence, offer extra reasons to propel the quote.
Even so, nearness to the US Presidential Election debate and a plethora of Fed speakers scheduled for crossing wires during the North American session question the risk-takers.
Hence, the S&P 500 Futures register 0.30 intraday gains to 3,356 while the US 10-year Treasury yields and New Zealand’s NZX 50 are both mildly positive by the time of the press.
Moving on, the Asian calendar doesn’t carry any major factors worth watching than the risk catalysts. As a result, the continuation of the latest pullback can be expected ahead of the US session. Though, any major positives for the greenback won’t be taken lightly.
FXStreet’s Ross J Burland suggests the “wait and watch” approach for the bulls while saying,
At this stage, the conditions are still not ideal for entry as bulls would be prudent to wait until the momentum indicators are more bullish and price pulls away from the 21-moving average. The price will indeed need to move higher towards the Fibo targets, but bulls would be on the lookout for structure lower down below price from where a buy-in at a discount might be achieved on pullbacks.