- The NZD / USD is witnessing some selling for the second day in a row on Thursday.
- The prevailing sentiment of risk aversion benefits the safe-haven USD and puts some pressure on the pair.
- Investors are now waiting for the release of the US Q4 GDP report to get fresh momentum.
The pair NZD / USD remain on the defensive during Thursday’s European session, falling to fresh daily lows near the 0.7100 level, at a minimum of one week.
The pair has extended this week’s retracement slide, from the 0.7240-50 resistance zone, and has seen some continuation selling for the second day in a row on Thursday. The prevailing sentiment of risk aversion has continued to drive some money flows towards the US dollar. safe haven and has put some downward pressure on the higher perceived risk NZD.
Since a lot of positive news had already been included in the price, doubts about the timing and size of a new US stimulus package have led investors to withdraw profits after the recent rally in stock markets. In addition, the re-imposition of strict lockdown measures and a delay in the supply of the vaccine to stop COVID-19 have further clouded market sentiment.
On the other hand, Wednesday’s pessimistic FOMC statement has fueled concerns on the possible economic consequences of the coronavirus pandemic. The US central bank expressed concern about the pace of the recovery, saying that the current public health crisis poses considerable risks to the economic outlook, further affecting investor sentiment.
The reduced appetite for risk has been reinforced by the continuing decline in US Treasury yields This could prove to be a key factor limiting any further gains for the USD and lending some support to the NZD / USD pair, so it is prudent to wait for a strong continuation of selling before positioning for any further bearish movement.
Market participants now await the release of the US Advanced Fourth Quarter GDP Growth Report |, which will be published at the beginning of the American session. This, coupled with developments around the coronavirus saga and broader market risk sentiment, could influence USD price dynamics and generate some trading opportunities around the NZD / USD pair.
NZD / USD technical levels
.
Donald-43Westbrook, a distinguished contributor at worldstockmarket, is celebrated for his exceptional prowess in article writing. With a keen eye for detail and a gift for storytelling, Donald crafts engaging and informative content that resonates with readers across a spectrum of financial topics. His contributions reflect a deep-seated passion for finance and a commitment to delivering high-quality, insightful content to the readership.
