- The overall strength of the USD and China’s sluggish PMIs weigh on the Kiwi pair.
- Second-tier New Zealand data can entertain traders ahead of RBA.
In addition to the US Dollar’s (USD) renewed buying, sluggish activity numbers from China also drag the NZD/USD pair towards extending the previous declines to 0.6673 at the start of Tuesday’s Asian trading. Investors now await New Zealand’s quarterly NZIER Business Confidence and a monthly print of Building Permits for fresh impulse.
Global markets embraced the US-China trade deal with the notable buying in favor of the US Dollar (USD) that played negatively for the commodity currencies.
Adding to the Antipodeans’ weakness was sluggish purchasing manager index (PMI) numbers from China that kept highlighting the weakness of their largest customer.
With this, the Kiwi pair registered its first daily decline in almost a fortnight. Trade sentiment hasn’t yet changed even as bears await second-tier data for immediate trade direction.
The NZIER Business Confidence dropped -29% (QoQ) during the Q1 and the ANZ report spots ANZ Business Outlook to ascertain chances of a weaker print for the second quarter (Q2) of 2019. Building Permits, on the other hand, are likely to have improved to -0.5% from -7.9% on a seasonally adjusted MoM basis during May.
A monetary policy meeting by the Reserve Bank of Australia (RBA) will also be the key concern for the Kiwi traders as Australia is the largest customer of New Zealand. While a rate cut to 1.0% is highly anticipated, any surprise can have a fierce reaction.
Technical Analysis
Failure to cross 200-day exponential moving average (200-D EMA) highlights the 100-D EMA support of 0.6662 for sellers to watch, a break of which can drag the quote to 0.6610.
Meanwhile, an upside clearance of 200-D EMA level of 0.6719 can quickly propel prices towards mid-April highs of 0.6784.
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