- The NZD/USD pair trades near 0.6860 at the start of Asian trading on Monday.
- The pair took advantage of RBNZ Governor’s talk down to the rate-cut whereas developments at the US-China trade negotiation also buoyed trade sentiments.
- The pair has 0.6870 as nearby resistance while 0.6845 may act as immediate support.
The New Zealand Dollar (NZD) trades near 0.6860 against the USD during initial Asian trading on Monday. NZD/USD pleased buyers with nearly 2% gains by the end of last week as RBNZ Governor’s refrain to favor rate-cut talks and progress at the US-China trade negotiations at Beijing helped build trade optimism surrounding the Kiwi.
The Reserve Bank of New Zealand (RBNZ) matched market consensus of no rate change on Wednesday with its usual tone favoring no rate alterations in near future. However, Governor Adrian Orr grabbed the limelight when he downplayed a question for rate cut during press conference just after the monetary policy meeting.
One more catalyst that played its part in the Kiwi’s increase was progress on the US-China trade talks. The US delegates discussed trade with their Chinese counterparts on Thursday and Friday while closing the talks by confirming welcome progress without giving much detail. Though, comments from the US President Donald Trump signaling that the American tariffs may wait for 60-days after March deadline and even the deadline can be extended became good news for global trade watchers.
During early Monday, traders remained quiet as investors might have to wait for a day on US-China trade developments from Washington due to the US holiday at the week start. On a softer note, Domestic Performance Services Index for January, as released by the BusinessNZ, surged to the highest levels since May 2018 to 56.3 from 53.2 registered earlier.
Analysts at the ANZ Research say, “Positive US-China trade headlines have buoyed risk sentiment with kiwi coming along for the ride. With only second tier data releases on both sides this week, headlines will continue to matter for this cross. We continue to expect recent strength in kiwi to retrace in time.”
NZD/USD Technical Analysis
The NZD/USD pair needs to clear 0.6870 resistance in order to aim for 0.6905 upside level, without which gradual weakness in the 14-bar relative strength index may play its role.
On the contrary, 0.6845 and 0.6820 may offer immediate supports to the pair ahead of highlighting 0.6800 and 0.6790 as rests.
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