NZD/USD awaits more clues near four-month high beyond 0.6450

• NZD/USD bulls catch a breather following the four-day rise to the highest since February 20, 2020.
• Mixed signals concerning the US-China trade relations, pre-NFP cautious mood join light calendar to portray a lack of moves.
• Qualitative catalysts might offer fresh impulse ahead of the US employment data.

NZD/USD stays mildly positive around 0.6470 amid the initial Asian session on Friday. Even so, the Kiwi pair remains below the previous day’s top of 0.6478, the highest in four months.

The pair’s latest moves are likely driven by the mixed sentiment concerning the US-China trade relations. While US President Donald Trump and Secretary of State Mike Pompeo raised barriers for a smooth running of the trade relations between the global leaders, Trade Representative Robert Lighthizer said he feels “very good” about the phase one trade agreement with China.

It should also be noted that US President Donald Trump’s upbeat comments concerning the US-Iran relations, as well as the early positive signals for oil prices, play in favor of the quote’s further upside.

It’s worth mentioning that the broad US dollar weakness and market’s optimism for the economic recovery, coupled with calls of further stimulus from the global central banks, seemed to have recently helped the quote register four-day winning streak to the multi-day top.

Having said that, the US 10-year Treasury yields seesaw near the late-March high of 0.82% whereas S&P 500 Futures print 0.10% gains to 3,114 by the press time.

Considering the lack of major data/events from New Zealand, market players may keep eyes on the US-China story for fresh impulse. However, US employment figures for May will the key while looking for a firm direction. TD Securities anticipate downbeat prints of the jobs report while saying, We forecast payrolls to fall again in May at -3mn, but by much less than in April (when they plunged by 20.5mn). The net drop in continuing claims in the last two reports suggests a turning point, with hiring starting to recover, but the net result was probably still a decline monthly. Unemployment likely rose again (TD: 17.5%), due in part to a reversal in some of the statistical issues that held down the rise in April, but it should start declining after May.”

Technical analysis

Not only the immediate resistance of 0.6490 but the February month’s top around 0.6505 also challenges the bulls amid overbought RSI conditions. As a result, a clear break below March high of 0.6373 could trigger a fresh downside targeting a 200-day SMA level of 0.6317.