- China data and positive start to the US earning season boost trade sentiment.
- Lack of data could keep highlighting market mood and the US-China negotiations for fresh impulse.
NZD/USD is on the bids around 0.6760 at the start of the week’s trading. The Kiwi pair recently took advantage of the renewed trade sentiment after upbeat China data and a welcome earnings report from the leading US banks propelled investor sentiment. Lack of data is likely to restrict market moves but developments surrounding the trade negotiations between the US and China could keep entertaining investors.
In addition to upbeat export figures, strong credit data from China, the world’s largest commodity user, also helped the antipodeans please buyers during Friday and carrying the gains forward.
It should also be noted that positive earnings report from the US leading banks like JP Morgan and Wells Fargo also played their role to further boost the investor sentiment.
As a mark of risk-on, the US 10-year treasury yields rose to nearly a month’s high around 2.56%.
Moreover, weaker than expected 98.00 print of the US Michigan consumer sentiment index to 96.9 became the additional catalyst that helped the Kiwi’s surge.
While positive China data and the boost to trade sentiment were positive catalysts, the recently concluded International Monetary Fund (IMF) meeting didn’t offer any good news to cheer. The global lender remained cautious over macroeconomic growth with its statement “risks remain tilted to the downside’.
Here are some of the key recent headlines worth reading: Key headlines and weekend press stories
Looking forward, the US NY Empire Manufacturing Index (Apr) coupled with a television appearance on CNBC's Squawk Box by the Federal Reserve Bank of Chicago President Charles Evans could gain market attention. Also, new developments surrounding the progress over the US-China trade discussion would maintain their importance in directing immediate market moves.
The US NY Empire manufacturing gauge could rise to 6.0 from 3.7 prior whereas Fed’s Evans might not refrain from supporting his colleagues over stable monetary policy. The US and China are moving closer towards the final round of trade talks as conveyed by the US Treasury Secretary Steve Mnuchin over the IMF meeting and hence any more developments could please commodity traders.
NZD/USD Technical Analysis
The NZD/USD pair needs to surpass 0.6800 horizontal-resistance in order to aim for 100-day simple moving average (SMA) figure of 0.6810 whereas 50-day SMA level of 0.6815 and 0.6830-35 area could challenge buyers then after.
On the downside, 0.6740, 0.6710 and 0.6890 are likely nearby supports for the Kiwi traders to watch over ahead of shifting their focus back to 0.6850 rest-point.
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