- NZD/USD remains on the back foot as traders stay away from riskier assets amid recession fears.
- Data from China, the EU and not so upbeat trade headlines initially triggered risk aversion.
- 10-2 year yield inversion grabbed the headline.
With the fears of the global recession taking the rounds, the NZD/USD pair holds on to sellers’ list while trading near 0.6440 at the start of Thursday’s Asian session.
It all began with China’s below forecast activity numbers for July and then rolled on by sluggish data from the EU. Adding to the market fears are not so positive trade headlines from China. The dragon nation isn’t satisfied with the US rolling back tariffs and wants more of what discussed on Osaka to remain upbeat while talking trade in September.
As a result, equities face the sea of red while inversion of the US 10-year and 2-year treasury yields grabbed the headlines. It was the first time since 2007 that such yield inversion took place. The previous cases have generally preceded a global recession and hence gain high market attention this time around.
While trade news is likely to keep dominating the headlines amid lack of domestic data, employment numbers from the largest customer Australia could offer fresh impulse.
The three-week-old trend-line, at 0.6460, offers immediate resistance ahead of July 09 top surrounding 0.6500. Alternatively, 0.6400 round-figure and the latest low near 0.6378 can keep luring bears.
- R3 0.6527
- R2 0.6499
- R1 0.6476
- PP 0.6448
- S1 0.6425
- S2 0.6397
- S3 0.6374
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