NZD/USD: Range play continues after downward revision of New Zealand's Business Confidence
- NZD/USD trades in a 50-pip range for the fourth straight day.
- New Zealand's Business Confidence for June has been revised lower.
- China's official Manufacturing PMI reached three-month highs in June.
NZD/USD remains trapped in the narrow range of 0.64 to 0.6450 for the fourth straight trading day on Tuesday. The struggle for clear directional bias continues despite the dismal data released at 01:00 GMT.
New Zealand's ANZ Business Confidence for June was revised lower to -34.4 from the initial estimate of -33.00. The indicator had declined to -41.8 in May. Meanwhile, the ANZ Activity Outlook for June came in at -25.9%, following May's -38.7% print.
While the Business Confidence improved from lows seen in May, it still remains in the negative territory. In addition, activity indicators remain at recessionary levels and employment indicators are particularly grim, ANZ said.
As such, one may argue that the NZD bulls have little reason to put a strong bid under the Kiwi. However, traders should note that China reported better-than-expected PMI numbers early Tuesday. In fact, China's NBS Manufacturing PMI rose to three-month highs in June. Hence, a range breakout cannot be ruled out. That said, the Kiwi may come under pressure if the geopolitical tensions between the US and China escalate due to the latter's decision to pass the controversial Hong Kong security law.
So far, there are no signs of stress in broader markets. The futures tied to the S&P 500 are currently reporting a 0.30% gain, a sign the US stocks are likely to extend Monday's rally. Therefore, Kiwi and high beta currencies could draw stronger buying pressure.
Technical levels
Author
Omkar Godbole
FXStreet Contributor
Omkar Godbole, editor and analyst, joined FXStreet after four years as a research analyst at several Indian brokerage companies.
