NZD/USD witnesses pullback to 0.6660 ahead of China trade balance
|- The early week profit-booking drags the Kiwi from five-week high.
- China data and trade news in the spotlight for fresh impulse.
Having surged to the five-week top on Friday, NZD/USD portrays profit-booking ahead of China data as the quote drops to 0.6660 during the early Asian session on Monday.
The Kiwi pair have recently benefited from the US Dollar (USD) weakness on rising concerns of the Federal Reserve rate cut. The speculations grew additionally after May month employment data unearthed the latest weakness in the policy catalyst.
While the absence of major data from New Zealand and holiday at the largest customer Australia seem taming market momentum, upcoming trade numbers from China can be followed for fresh impulse.
However, traders remain on the sidelines ahead of May month trade balance data due to recently weak numbers from the world’s largest commodity user.
Forecasts suggest an increase to $20.50 billion trade surplus from $13.83 billion prior while imports and exports growth likely coming in to -3.8% each versus +4.0% and -2.7% respectively.
Additionally, prospects of the US-China trade deal are likely another important catalyst to follow. Recently, the US Treasury Secretary Steve Mnuchin flashed mixed signals concerning the meeting between the US and Chinese leaders from Group of 20 finance leaders.
Technical Analysis
Failure to cross 0.6580-85 region comprising late-April high increases the odds for the quote’s pullback to 50-day simple moving average (SMA) level of 0.6565 whereas 0.6580 and 0.6560 may limit further downside.
Alternatively, successful rise over 0.6585 enables the buyers to aim for 200-day and 100-day SMA levels around 0.6710 and 0.6730 respectively.
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