NZD/USD: looks set for another subdued day, eyes on G7 and trade

As the New Zealand markets get underway, Wellington starts off at 8902 points, slightly firmer than expected, and a brave start considering the risk-off environment ahead of the G7 that could prove to be contentious considering the recent turn in rhetoric and tariff announcements from the Whitehouse towards not only China but its allies in Canada and the EU. 

Currently, NZD/USD is trading at 0.7027 with an early Asian high of 0.7029 and a low of 0.7025. Overnight, the Kiwi dropped from 0.7055 to 0.7025.  However, as analysts at ANZ pointed out, for the third morning in a row, the kiwi finds itself pretty much at the same level:

"It did attempt a little higher overnight and tested resilience at 0.7060, but lacked momentum. It continues to look sidelined awaiting catalysts. Perhaps the G7 meeting this weekend, where trade will no doubt be on the agenda, could be just that."

For the day ahead, the bird looks set on another subdued day of activity considering the lack of scheduled events. There is nothing for Australia either. However, China releases May trade data around 1pm Syd/11am local: 

"The median forecast in the Bloomberg survey is for the surplus to rise from $28bn to $33bn, with exports up 11%yr and imports up 18%yr in US$ terms. The rise in commodity prices alone should be enough to ensure swift growth in import values. China May consumer and producer price data is due Saturday. Inflation in China has not been a policy concern for some years," analysts at Westpac explained.  

NZD/USD levels

NZD/USD Technical Analysis: Kiwi losing steam below 0.7050, starting to break down from wedge formation

Key support is located at 0.6880 while resistance is located at 0.7030. NZD/USD is trading above the 200-month moving average support at 0.6994 and weekly technicals have turned bullish while the price targets the descending 10-W SMA at  0.7079.  0.7440 comes as key upside target as the January tops, however, there is a bearish wedge formation that points to a correction and possible reversal at 0.7080. On the downside, a break of 0.7000 and 0.6980 opens risk to 0.6850/80. 0.6780 comes as next downside target meeting the lows of mid-Nov 2017.