NZD/USD: On bid around 0.6910 despite mixed New Zealand trade balance as export growth gained major attention

  • February month trade balance data flashed mixed numbers but improvement in exports from a surprise drop in January pleased Kiwi buyers.
  • The quote needs sustained break of medium-term trendline resistance, at 0.6915 now, in order to justify its strength.

NZD/USD is taking bids near 0.6910 at the start of Tuesday’s Asian trading. February month New Zealand trade balance figures strengthened the quote during early-day trading. The Kiwi managed to regain traction on Monday as an inversion of the 3 month – 10 years US treasury yields joined hands with positive developments concerning the US-China trade deal. Looking forward, US housing and consumer confidence data will now be in investors’ radar.

February month trade balance figures from the Statistics New Zealand pleased Kiwi traders. Imports came in at $4.80 billion versus $4.90 billion forecast and $5.28 billion (revised) prior whereas exports surged to $4.82 billion against $4.70 billion market consensus and $4.33 billion (revised) earlier. Further, the trade balance (YoY) figure flashed $-6.62 billion deficit compared to $-6.13 billion expected and $-6.45 billion registered previously. On a monthly basis, trade balance grew to $12 million from $-109 million forecast and $-948 million revised earlier.

While reports favoring the inversion of 10-year US Treasury yields to the 3-month bills offered initial weakness to the US Dollar on Monday, weaker prior -0.25 (revised) print of Chicago Fed national activity index to -0.29 and a surprise rise in German IFO data provided additional downside of the greenback.

On the other hand, positive updates surrounding the US-China trade deal strengthened the New Zealand Dollar (NZD) as China is New Zealand’s second largest customer after Australia. As per the reports, US delegation headed by the Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin will negotiate the trade deal with China in Beijing on March 28 whereas the Chinese team led by Vice-Premier Liu He will visit Washington on April 03 for further talks.

February month housing market details and the current month confederation board’s consumer confidence figure from the US will now bear market attention.

Forecasts suggest the US housing starts and building permits both likely weakening on a monthly basis to 1.215M and 1.3000M versus 1.230M and 1.317M (revised) respectively. On the other hand, January month housing price index could remain unchanged at 0.3% growth rate whereas consumer confidence could also increase from 131.4 earlier.

Additionally, fresh updates from the US-China trade front could also be of importance to the Kiwi traders.

NZD/USD Technical Analysis

Unless providing a successful break of the descending trendline stretched since October 2018, at 0.6915 now, chances of the NZD/USD pair’s pullback to short-term upwards sloping support-line at 0.6870 can’t be denied. Though, pair’s slip under 0.6870 could trigger its leg down to 0.6830 and 0.6800 rest-points.

Meanwhile, a successful clearance of 0.6915 enables the quote to challenge current month high around 0.6940 ahead of aiming 0.6970 and 0.7000 resistances during further upside.

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