NZD/USD remains on the back foot around 0.6560 amid trade jitters
- Improvement in the US trade relations with the rest of the world, except China, offers intermediate relief to Antipodeans.
- Lack of data could keep highlighting the US-China trade scenario as a major force to provide fresh impulse.
NZD/USD trades little weak around 0.6565 at the start of Thursday’s Asian session.
Even if initial optimism surrounding the US trade relations with rest of the globe helped the Kiwi on Wednesday, the buyers couldn’t sustain downbeat industrial production data from the US and China that added weakness into the commodity front.
While early-yesterday comments from the US President Donald Trump, Treasury Secretary Steve Mnuchin and China’s President Xi Jinping raised hope of a successful trade deal, there was no strong news favoring that the world’s two largest economies are closing in on a deal.
However, losses were capped by the news report that the US is delaying car import duties for six months and is close to a metal deal with Canada and Mexico.
Recently, the South China Morning Post conveyed that the US President Donald Trump signed an executive order declaring a national emergency on information security by laying the ground for the US ban on some global telecommunication companies including China’s Huawei.
The news could further strengthen the US grip of China but also increases the chances of the dragon nation’s retaliation.
Moving forward, there is no major data scheduled from New Zealand today but employment numbers from its largest customer Australia and China’s house price index and foreign direct investment could offer intermediate direction.
From the US, housing market indices could join hands with weekly initial jobless claims and a monthly print of Philadelphia Fed manufacturing to entertain momentum traders.
Technical Analysis
Unless breaking a downward sloping trend-line stretched since late-March, at 0.6585 now, chances of the quote’s further weakness towards 0.6525 can’t be denied. However, 0.6500 and October 2018 bottom near 0.6425 might challenge bears then after.
Should there be an uptick past-0.6585, needs to be validated by 0.6600 round-figure in order to aim for 0.6630, 0.6650 and 0.6685/90 consecutive resistance.
Author
Anil Panchal
FXStreet
Anil Panchal has nearly 15 years of experience in tracking financial markets. With a keen interest in macroeconomics, Anil aptly tracks global news/updates and stays well-informed about the global financial moves and their implications.
