NZD/USD: On the back foot above 21-day EMA, second-tier NZ data awaited ahead of the key day
|- NZD/USD fails to cheer trade-positive news from China amid broad USD strength.
- Traders remain cautious heading into the key day comprising the ECB and the US CPI.
- New Zealand’s (NZ) Food Price Index will act as an immediate catalyst.
Market’s preference for the US Dollar (USD) stops the NZD/USD pair from cheering the trade-positive news from China as the Kiwi pair takes the rounds to 0.6410 at the start of Thursday’s Asian session.
China’s Finance Ministry released a list of goods to be exempted from higher tariffs and triggered risk-on during Wednesday’s Asian session. That follows the recent news that China’s Premier Li Keqiang met a delegation of the US business leaders and showed a positive attitude towards solving the US-China trade relations.
The US President Donald Trump did little except harshly criticizing the Federal Reserve to cut the interest rates. However, the greenback seems to be practiced to it as it ignored the comments and rather concentrated more on the upbeat data like Producer Price Index (PPI) and MBA Mortgage Applications.
While trade positive news helps the Kiwi pair to remain above the 21-day exponential moving average (EMA), investors remain on the sidelines ahead of the key US CPI and the European Central Bank (ECB) monetary policy meeting, not to forget New Zealand’s Food Price Index.
New Zealand’s Food Price Index (MoM) for August might reflect the surge in pork demand from China that has already propelled the dragon nation’s Consumer Price Index (CPI) and could add to the previous 1.1% growth.
Further, the US CPI could deviate from the factory-gate inflation data published earlier but the ECB’s heavy stimulus and further deposit rate cut (expected) can keep pleasing the greenback buyers.
Technical Analysis
The pair trades in a range between the 21-day EMA level around 0.6400 and 0.6445 with 50-day EMA level of 0.6475 and 0.6335 be the likely follow-on levels to appear on the chart after either side break.
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