NZD/USD: Bounce from 50-day MA stalls near 0.6365 despite hopes of US-China deal
|- NZD/USD jumped from 50-day MA support on trade optimism.
- The bounce seems to have stalled near 0.6365.
- Reports of internal trade-related disagreements in the Trump administration are doing the rounds.
NZD/USD bounced up from the 50-day moving average during the US trading hours, but the recovery rally now looks to have stalled near 0.6365.
The Kiwi picked up a bid at lows near 0.6342 after China raised hopes of a trade deal with the US after agreeing with Washington to roll back some tariffs. A Chinese government spokesman said the two nations would remove tariffs – taxes imposed on imports – in phases as progress is made on the agreement, according to the Guardian.
The International Monetary Fund (IMF) responded positively to the latest developments by stating that the easing of trade tensions could persuade its officials to revise up forecasts for global growth next year.
In the last few hours, however, reports of internal disagreements in the Trump Administration stalling a sign-off on the deal have hit the wires and put the brakes on Kiwi's recovery rally.
Also, the dovish RBNZ expectations may be keeping gains under check. New Zealand's seasonally adjusted unemployment rate rose to 4.2% in the September quarter, up from 3.9% last quarter, according to the data released Tuesday. The dismal numbers bolstered bets that the Reserve Bank of New Zealand would cut rates next week.
That said, the futures on the S&P 500 are currently trading 0.34% higher on the day. With risk-on sentiment intact, the NZD is more likely to extend the bounce to 0.64.
The 50-day MA support at 0.6344 may come into play if China's trade data, due later today, misses expectations by a big margin, overshadowing trade optimism.
Technical levels
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