NZD/USD drops below 50-bar SMA after fresh coronovirus news

• NZD/USD shed 30+ pips as the numbers of coronavirus cases from China rallied.
• The revision in the diagnostic standard for coronavirus cases seems to blame for the surge in counts.
• A six-week-old falling trend line adds to the upside barrier.

NZD/USD declined more than 30 pips to the intra-day low of 0.6428, currently around 0.6445, as soon as the latest coronavirus numbers arrived from China during Thursday’s Asian session.

As per the update, Hubei province has reported 14,840 new coronavirus cases while the death toll rises 242 to 1,310 by the end of February 2020. The surge in numbers could be attributed to the revised diagnostic standard.

Following the release, the market’s trade sentiment turned weaker with the S&P 500 Futures down 0.33% to the sub-3,370 mark.

Earlier on Thursday, the RBNZ Assistant Governor/GM Economics, Financial Markets and Banking, Christian Hawkesby favored interest rate held at a record low for a long time. Prior to that, the RBNZ Governor Adrian Orr cited downside risk to the economic outlook.

Traders will now look more seriously towards the coronavirus headlines considering the latest turn in risk-tone. However, that doesn’t dim the importance of January month inflation numbers from the US for which Westpac said, “The US data focus is Jan CPI, where expectations are 0.2%mth, 2.4%yr overall, 0.2%mth, 2.2%yr ex-food and energy. Any major surprise could impact markets, but there is limited Fed focus on inflation at the moment relative to activity and sentiment and this is not the Fed’s preferred inflation measure.”

Technical Analysis

Unless breaking a three-week-old resistance trendline currently around 0.6515, NZD/USD prices are less likely to lure the bulls, which in turn highlight the importance of 0.6420 and 0.6370 as the immediate supports.