NZD/USD technical analysis: Recovery continues after RBNZ Gov Orr's comments and China data

The NZD continues to recover lost ground after RBNZ Governor Orr's comments.
The surge in China's April imports may help Kiwi erase post-RBNZ drop.

Omkar Godbole FXStreet Contributor

NZD/USD's recovery from the session low of 0.6525 printed immediately after the RBNZ rate cut announcement earlier today continues with the spot currently trading at 0.6585.

RBNZ's Governor Adrian Orr was out on the wires soon before press time stating that there are significant uncertainties around the rate track in New Zealand and the US-China trade war is one of the major concerns of the central bank. Orr added further that he is surprised by the downturn in business sentiment and consumer spending.

Orr's comments may bolster expectations of another rate cut in August, complicating Kiwi's recovery.

However, China April trade data released a few minutes ago offered good news in the form of a 10% year-on-year spike in imports in CNY terms, a sign of an uptick in domestic demand. As a result, Kiwi may rise back to the pre-RBNZ level of 0.66.

That said, the outlook would remain bearish as long as the descending trendline connecting March 26 and April 17 highs is intact.

Daily chart

Trend: Bullish above trendline resistance

Pivot points

1. R3 0.667
2. R2 0.6651
3. R1 0.6625
PP 0.6606
1. S1 0.658
2. S2 0.6561
3. S3 0.6535

Author

Omkar Godbole

FXStreet Contributor

Omkar Godbole, editor and analyst, joined FXStreet after four years as a research analyst at several Indian brokerage companies.

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