NZD/USD battles 0.6820 monthly hurdle amid positive risk-tone, focus on US data, Omicron

• NZD/USD seesaws near one-week high after being the second biggest G10 gainer.
• Stimulus hopes, Omicron updates favored risk appetite despite strong US data.
• NZ already reduced booster gap to four months, eyes 90% jabbing.
• US Durable Goods Orders, PCE Inflation for November eyed for fresh impulse, risk catalysts are important too.

NZD/USD remains sidelined after refreshing the weekly top by 0.6823, easing to 0.6800 during the initial Asian session on Thursday. The kiwi pair previously cheered risk-on mood before the latest challenges to the market sentiment and a light calendar tested the bulls.

Recent comments from the White House, shared by the Financial Times (FT), raise concerns over the availability of Pfizer’s drug that earlier favored optimism concerning Omicron’s cure. On the same line was the FT news stating, “France on Wednesday canceled its order of Merck’s drug after data showed it resulted in a reduction of only 30% in the risk of hospitalization and death, significantly lower than earlier expectations.”

Hopes of overcoming the South African covid variant, dubbed as Omicron, joined optimism concerning US President Joe Biden's Build Back Better (BBB) stimulus to favor the market’s mood the previous day.

After US Army conveyed positive updates for a single vaccine to battle covid and all variants, the US Food and Drug Administration (FDA) approved a pill from Pfizer to treat Covid-19.

On the other hand, Reuters quotes White House spokeswoman Jen Psaki while saying, “We believe that Senator Manchin has been engaging with us over the course of time and months in good faith." It’s worth noting that Joe Manchin poured cold water on the face of stimulus expectations by being the only Democrat to oppose the much-awaited aid package that needs all the party members’ support to get through the house.

It’s worth noting that the strong US data also failed to stop the NZD/USD on Wednesday, neither did the Sino-American tension and the US-Russia tussles. That said. the US Q3 GDP rose past the 2.1% forecast to 2.3% whereas the CB Consumer Confidence for December came in better than upwardly revised 111.9 prior to 115.8.

Additionally helping the NZD/USD prices is New Zealand’s push for faster vaccinations to match Australia’s global record of 90%. Recently, Auckland reduced the time for booster shots to four months versus the previous six.

To portray the risk-on mood, the Wall Street benchmarks had a second positive day while the US 10-year Treasury yields and the Dollar Index (DXY) marked a negative daily closing by the end of Wednesday’s North America session. Also, the S&P 500 Futures print mild gains by the press time.

Moving on, a lack of data ahead of the US open might extend the latest pullback moves. However, positive headlines concerning Omicron and US stimulus may help the NZD/USD pair buyers to keep the reins. Following that, the US November PCE inflation and Durable Goods Orders will be crucial to watch amid hopes of a faster Fed rate hike, starting with early 2022.

Technical analysis

Bullish MACD signals join upside break of the 100-SMA and a five-week-old falling trend line to underpin the NZD/USD battle with the monthly resistance line near 0.6820. However, RSI conditions are overbought and may probe further advances.

Should Kiwi pair buyers rise past 0.6820, the 200-SMA level near 0.6880 and late November’s swing high near 0.6960 will be next in the line of the bull’s targets.

Meanwhile, pullback moves may initially aim for the 100-SMA level of 0.6775 before challenging three-week-long horizontal support near 0.6735-30.