NZD/USD clings to 0.6500 in search of fresh clues
|- US Dollar (USD) strength continues to derail commodity-linked currencies.
- Trade woes and expected rate cut from RBA add further weakness.
- Lack of data could keep highlighting qualitative catalysts for fresh impulse.
Having witnessed heavy downpour during last-week, the NZD/USD pair trades modestly flat near 0.6500 at the start of Monday’s Asian session.
The Kiwi pair, alike other majors except for the Japanese Yen (JPY), couldn’t withstand the overall strength of the US Dollar (USD) amid upbeat retail sales and industrial production numbers.
Adding to the downturn could also be pessimism surrounding its largest customer Australia after higher than expected unemployment rate signals Reserve Bank of Australia’s (RBA) another rate cut.
The US President Donald Trump had been threatening to levy fresh tariffs on China if his Chinese counterpart Xi Jinping fails to meet him at the upcoming G20 summit on June 28-29. However, Chinese media shows little reaction to it and continues to criticize the Trump administration’s trade protectionism.
While Wednesday’s FOMC and Thursday’s New Zealand GDP are likely to grab major market attention, developments surrounding the US-China trade could offer intermediate moves to the traders.
Technical Analysis
Despite slipping beneath the late-May low, around 0.6500, the quote is yet to break the year 2019 low of 0.6480 that holds the gate for the pair’s downturn to October 2018 lows near 0.6430. As a result, chances of the pair’s pullback to 0.6530 and then to May 27 high of 0.6560 can’t be ruled out.
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