- Kiwi benefitted from upbeat sentiment at largest customer, sluggish US Dollar (USD).
- Increased expectations of rate cuts from the Fed, downbeat data weighed on the USD.
- 200-D EMA continues to restrict upside amid lack of fresh catalysts.
Despite being one of the major G10 gainers on the previous day, the NZD/USD pair bulls again run out of steam to clear 200-D EMA as the pair takes the rounds to 0.6705 at the start of Thursday’s Asian session.
On Tuesday, the Kiwi pair rose back to the key exponential moving average (EMA) mainly on the back of greenback’s weakness and upbeat data from its largest customer Australia.
With the US President Donald Trump’s likely nomination of 2 members to the Federal Reserve Board, the expected doves, chances are high that Mr. President’s favor for loose monetary policy will dominate in the future. Adding to the greenback weakness could be record high trade deficit and disappointing outcomes from the ISM Non-Manufacturing PMI and the Factory Orders.
Not only the US but likely replacement of the European Central Bank President (ECB) Mario Draghi with the International Monetary Fund (IMF) Chief Christine Lagarde, a policy dove, also increased odds for easy global monetary policies in the future. The same pleasing commodity and Antipodeans buyers.
Moving on, the economic calendar doesn’t have any major data to offer, which in turn highlights the trade/political news to be followed for fresh impulse.
Technical Analysis
With the 14-day relative strength index (RSI) again marching towards the overbought region, odds of witnessing another pullback from the 200-day exponential moving average (200-D EMA) level of 0.6720 are might brighter. As a result, 100-day EMA level of 0.6664 and June 26 low of 0.6594 can please sellers. Meanwhile, an upside break of 0.6720 might not hesitate to flash 0.6740 and 0.6785 on the chart
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