NZD/USD: A top performer on busy event calendar, testing trendline resistance

NZD/USD has been a top performer on Tuesday, bar the US dollar, popping to market highs following the Reserve Bank of New Zealand's Finacial Stability Report. Ahead of today's Trade Balance and RBNZ's Governor Adrian Orr's speech where he is due to hold a press conference about the Financial Stability Report, in Wellington, NZD/USD is ending on Wall Street 0.17% higher around 0.6430 and the highs of the day of 0.6431. 

Main focus stays with Sino/US trade relations

Overall, however, the bird remains largely unchanged as the USD strengthened more broadly on the back of trade optimism. A Bloomberg article stated that "the officials “reached consensus on properly resolving relevant issues” and agreed to stay in contact on the remaining points for a so-called phase one pact, China’s Ministry of Commerce said in a statement.

The US Trade Representative’s office confirmed a meeting took place but declined to comment on the contents." Such sentiment is bullish for risk-on trades and especially for the commodity complex for which the kiwi is correlated to. However, there has been less uptake in recent sessions as investors look for some concrete developments rather than the constant barrage of conflicting headlines and even should a so-called "Phase-One" deal be secured, markets will immediately look to the more elusive Phase-Two deal which is where the fat on the bone comes in.  

The second phase is an ambitious one and would focus on a key U.S. complaint that China effectively steals U.S. intellectual property by forcing U.S. companies to transfer their technology to Chinese rivals, something that Trump is determined to resolve but may face a wall of opposition from the Chinese. 

Key events for NZD

Meanwhile, a better-than-expected Q3 NZ Retail Sales print gave something of a momentary dash higher in the kiwi yesterday – the bird fell into a choppy uptrend since and into the RBNZ Financial Stability Report: Acting to bolster financial system resilience (FSR). The FSR is arguably just the warm-up act for the RBNZ’s final decision on bank capital levels, due on 5th December. 

Looking ahead, we have the trade balance and RBNZ governor Orr speaking for which a preview will be posted within this article in moments.

More to come...

NZD/USD levels

Bulls are testing trend line resistance as well as the 21 4-hour moving average with the 200-hour moving average turning neutral/bullish.