- NZD/USD seesaws near multi-year low amid US-China trade pessimism.
- Global recession calls also exert downside pressure on the quote.
- Absence of domestic data will keep highlighting trade news for fresh impulse.
With no traces of “good calls” from China to the US renewing trade war fears, the NZD/USD pair remains on the back foot while taking rounds to 0.6360 at the start of Wednesday’s Asian session.
The US President Donald Trump’s claim of receiving two good calls from China lacks validation from Beijing, which in turn highlight fears of a tensed trade talks between the US and China in September, if any.
Additionally, upbeat numbers from the US Consumer Confidence and the Richmond Fed Manufacturing Index provided further weakness to the pair.
Also exerting the downside pressure is the deepening of the US two-year and 10-year yield curve inversion that deepens to signal upcoming global recession.
As a result, the New Zealand Dollar (NZD) turns out to be the biggest G10 loser while the US Dollar (USD) stands on the other side, which in turn portrays the Kiwi pair’s weakness.
Given the absence of domestic data/events, the US-China trade stories will keep driving the markets.
Technical Analysis
August 19-20 lows surrounding 0.6400 act as immediate resistances to break in order to aim for 21-day simple moving average (SMA) level of 0.6450 whereas the recent bottom of 0.6340 holds the key to the pair’s slump to September 2015 trough near 0.6240.
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