NZD/USD jumps to 1-1/2 week tops, above mid-0.6800s
| • Fresh US-China trade optimism fuels risk-on mood and helped regain traction.
• The up-move seemed rather unaffected by some renewed USD buying interest.
• Traders now eye second-tier US economic releases for short-term impetus.
The NZD/USD reversed an early dip to the 0.6800 neighbourhood and touched over a one-week high level of 0.6859 in the last hour.
In what could be termed as a turnaround, the pair picked up pace since the early European session and turned higher for the fourth consecutive session amid growing optimism over a possible resolution of the US-China trade disputes.
As trade talks concluded in Beijing, optimistic trade-related comments by China's President Xi Jinping, saying that the US and China have made new progress on significant issues, helped improve risk sentiment and fueled gains for perceived riskier currencies - like the Kiwi.
According to Xinhua, official state-run press agency of the People's Republic of China, both sides discussed topics including technology transfer, IP protection, non-tariff barriers, services, agriculture, and trade balance, and moved closer to a memorandum of understanding.
This coupled with a bullish mood around commodity space provided an additional boost, though some renewed US Dollar buying interest, primarily on the back of weakness in the shared currency, turned out to be the only factor keeping a lid on any strong follow-through momentum.
Moving ahead, today's US economic docket, featuring some second-tier data - Empire State Manufacturing Index, industrial production data and Prelim UoM Consumer Sentiment, will now be looked upon for some short-term trading opportunities on the last trading day of the week.
Technical levels to watch
Immediate resistance is now pegged near the 0.6880-85 area, above which the pair is likely to surpass the 0.6900 handle and aim towards late-Jan. swing high resistance near the 0.6940 region. On the flip side, any meaningful slide might continue to find some support near the 0.6800 handle, which if broken might prompt some profit-taking slide further towards testing the very important 200-day SMA, around the 0.6755 region.
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