- NZD/USD stays little changed in search of fresh catalysts.
- Optimism surrounding the US-China trade deal favors the Kiwi to remain above 21-day EMA.
- The economic calendar signals another dull-day, trade/political headlines will be in the spotlight.
With fewer catalysts in the radar, NZD/USD fails to portray much momentum while taking rounds to 0.6425 at the start of Wednesday’s Asian session.
Following an initial decline on Tuesday, mainly due to China’s disappointing PPI, the Kiwi pair recovered some of the losses on the US Dollar (USD) weakness to close the day with almost no gains/losses.
China’s upbeat reading of Consumer Price Index (CPI), mainly due to a spike in food prices as per the Australia and New Zealand Banking Group (ANZ), couldn’t supersede sluggish Producer Price Index (PPI) and offered another worrisome sign for the world’s largest commodity user.
On the trade front, China’s Premier Li said that he hopes that trade talks with the US will make progress. Though, no new signs were flashed from the US side after President Donald Trump fired his National Security Adviser John Bolton. Mr. Bolton was considered having a tough stand against the Middle East and North Korea while often heard spreading doubts about the US-China trade relations.
Moving on, the economic calendar is light in Asian, except migration data at home and China’s M2 Money Supply and New Home Loans. As a result, traders will keep following trade/political headlines for fresh impulse. During the US session, monthly reading of Producer Price Index (PPI) might entertain market players.
Technical Analysis
As far as the prices are above the 21-day exponential moving average (EMA) level of 0.6408, 50-day EMA, at 0.6480, is a live possibility. However, pair’s rise beyond that depends upon the strength of the momentum. On the contrary, a downside break of 21-day EMA could fetch prices to last week's top surrounding 0.6330.
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