Asian markets are in the green today, on the back of the vaccine news that has sent investors into a bit of a spin.
Word that Pfizer’s experimental COVID-19 vaccine was more than 90 per cent effective sent stock markets to new highs and the same was true of the key risk-on majors.
The AUD/USD and NZD/USD were both outperformers as is often the case and that is still filtering through slowly in Asian trade. Although it looks like the pace of gains has slowed with both only marginally higher so far.
The reality is that price has been bullish for a while, but there is plenty of resistance above in both key pairs. The vaccine news sort of came out of nowhere as most of the focus has been on the election and the controversial result and likely legal challenges ahead.
So investors weren’t really focused on this today and it came as a surprise.
Looking to the AUD/USD, we can see that 0.7300 is now key resistance and this level dates back a month or two. Price got as high as that 0.7330 area before failing and pulling back underneath.
There will be plenty of work to do to break through that point, while the real line in the sand is 0.7400. Above that and we will be back in a real bull market type of territory.
If price drops 0.7250 then we could see a bit of a correction.
For the NZD/USD, the price action is a little more bullish as we can see that price has broken out of that range and through 0.6800.
This re-test is a great area to enter if it holds up. There are a few ways to approach it. Buy the pullback at 0.6800 and just above, or look to buy the new high if it comes.
We do of course have the RBNZ tomorrow and they are expected to roll out new stimulus, so that is a bit of a double-edged sword for the NZD as any negative rate talk might cap gains.