- The NZD / USD pauses in a familiar support zone, with its eyes set on a rally towards the 50% Fibonacci retracement.
- Markets await the US presidential inauguration immersed in an appetite for risk.
The pair NZD / USD is trading around the 0.7115 level, correcting the last bearish momentum to the low of 0.7102 after doing peaked at 0.7140.
The US dollar has extended its downward correction, causing the DXY dollar index to drop 0.28% at time of writing. an environment of risk appetite, as investors welcomed the remarks of US Treasury Secretary candidate Janet Yellen.
The feeling for the need for more fiscal stimulus it helped the markets rally, which sank the USD, which is correcting the 2% rise so far in 2021.
Yellen, who appeared before the Senate Finance Committee on Tuesday, urged lawmakers to “act big” in the next coronavirus aid package.
“Janet Yellen’s confirmation hearing clearly indicated the two-stage approach that the economic policy of the new administration will take. The first is to ensure recovery from the pandemic. The second is investing in infrastructure, digital and environmental, among other areas ”, explain the analysts of the ANZ bank.
Meanwhile, markets await the US presidential inauguration tomorrow in anticipation of phase two of Biden’s economic proposals, to be announced next month.
“For currency markets, US reflation expectations are negative for the US dollar as they reduce the demand for safe haven of the currency,” said analysts at ANZ bank.
“However, the swing between reflation expectations and current weak economic data is likely to continue for a while longer, limiting the rise in the NZD / USD in the short term.”
NZD / USD technical levels
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