NZD/USD: Bears catch a breath ahead of ANZ data, China PMI

  • Pessimism surrounding global trade, USD strength weigh on NZD/USD prior to the key day.
  • China PMI, ANZ sentiment numbers and the US-China trade talks in the spotlight ahead of the FOMC.

NZD/USD keeps quiet at the start of Wednesday’s Asian session, while making the rounds to 0.6615, as investors await ANZ numbers and China’s official PMI data for fresh impulse.

The Kiwi pair continued on its south-run during the previous day as the US President Donald Trump’s trade negative comments at the start of two-day talks in Shanghai weighed on commodity-linked currencies. Adding to the weakness was the absence of major data at home and the comparative US Dollar (USD) strength backed by upbeat data from the US.

China’s official Purchasing Managers’ Index (PMI) and ANZ’s monthly sentiment data will kick-start the key day that also offers the US-China trade talks and the much-awaited Federal Open Market Committee (FOMC) meeting.

July month activity data from China are expected to improve a bit as Manufacturing PMI is likely flashing 49.6 mark versus 49.4 whereas Non-Manufacturing PMI may rise to 54.5 from 54.2. On the other hand, The current month ANZ Activity Outlook could increase to 8.3% from 8.0% while Business Confidence might register -34.9 figure against -38.1 earlier.

Further, as per major market consensus and the US President Trump’s latest comments, the world’s two largest economies might end-up shaking hands with a smile at the closure of Shanghai talks that began after a halt of three-months. The same could offer additional weakness for Antipodeans. Additionally, the US Federal Reserve is largely expected to announce a 0.25% rate cut. Though, comments concerning the future action will be closely observed and might drag the greenback down in the case of being dovish.

Technical Analysis

Having breached six-week-old trend-line support, also slipping below the 50-day simple moving average (SMA), the quote is likely finding support around 0.6600 ahead of targeting monthly low surrounding 0.6567. Alternatively, 50-day SMA level of 0.6527 and the support-turned-resistance at 0.6538 can act as immediate upside barriers for the pair, a break of which can trigger its fresh rise towards 0.6660 and 0.6700 numbers to the north.

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