NZD/USD ticks higher on broad-based USD selling
|- Kiwi rises 0.24 percent as USD drops on fears of a trade war.
- Risk aversion and increased demand for Treasuries could cap further gains.
The American dollar is trading on the back foot in Asia on fears China will respond to Trump's tariffs, leading to a full-blown trade war.
Consequently, the NZD/USD has gained 0.25 percent and was last seen changing hands at 0.7225.
As per latest reports, Trump has exempted European Union (EU), Canada and Mexico from tariffs, meaning China is being singled out. This may yield a stronger retaliation from the world's second-largest economy.
So far, the NZD has managed to post against the greenback. However, a flight to safety and the increased demand for the treasury yields could cap further gains.
NZD/USD Technical Levels
A convincing break above 0.7263 (previous day's high) would open doors for 0.7292 (50-day moving average) and 0.7311 (March 6 high). On the downside, breach of support at 0.7205 (previous day's low) could yield a pullback to 0.7183 (200-day moving average) and 0.7153 (March 21 low).
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