NZD/USD: Defensive below 0.6300 with eyes on coronavirus headlines

• NZD/USD struggles to extend downpour below 0.6300 despite being on the back foot for the third day in a row.
• US President Trump, Aussie PM Morrison are about to announce their action plan to counter coronavirus, big stimulus likely.
• RBNZ’s sustained refrain to announce rate cuts grab market attention amid a lack of major data.

NZD/USD seesaws around 0.6260 during the Asian session on Thursday. While coronavirus (COVID-19) continues to dent the kiwi traders’ optimism and drags it down gradually, the RBNZ’s silence about the much-awaited rate cuts seems to help the pair. Investors now await the US and the Australian stimulus details for immediate moves.

Australian PM Scott Morrison will cross the wires in the next few minutes while giving details of his stimulus that bears expectations ranging from 10 to 20 billion in size. The Aussie leader has already announced the health package the previous day.

Following that, US President Donald Trump will also announce his details ‘major’ economic response to the pandemic. He is expected to roll out relief for taxpayers while also taking into consideration the small business houses.

The coronavirus is finally announced as the pandemic by the World Health Organization (WHO) but nothing major has been done after then. The latest updates from Washington and Italy have been downbeat whereas CME also decided to close the floor trading due to the virus from Friday-end.

Given the lack of major data/events, traders will keep eyes on the stimulus headlines from abroad for fresh impulse. However, calls for the RBNZ’s action are less likely to receded amid all this. In this regard, analysts at the Australia and New Zealand Banking Group (ANZ) said, “The global economy will come through the COVID-19 crisis, but with the disease still in expansion mode, unfortunately, QE looks more likely soon than an economic bounce. We expect the RBNZ to follow the Fed and BOE’s lead soon.”

Technical Analysis

The 0.6200/6190 area including lows marked during the late-February and early-March acts as the key support.