- Lack of fresh clues, pessimism surrounding largest buyers limits the NZD/USD pair’s gains despite recently weaker USD.
- 21/200-day EMA seems crucial levels to watch for predicting near-term price moves.
Having bounced off 21-day EMA, the NZD/USD pair stabilized around 0.6700 at the start of Thursday’s Asian trading.
The Kiwi pair failed to take advantage of the US Dollar (USD) declines on the previous day as pessimism surrounding Australia (its largest customer), coupled with lack of fresh catalysts, capped the Antipodeans buyers. However, better than forecast Trade Balance data helped the quote to remain positive on the day end for the first time in the week.
It should also be noted that Westpac now expects two rate cuts of 0.25% from the Reserve Bank of New Zealand (RBNZ), versus previously one, during August and November respectively.
The USD, on the other hand, had to bear the burden of sluggish data and market worries concerning the Fed’s next move.
On the trade front, the US and China are registering developments with the US President moving forward in allowing companies to sell inputs to China’s Huawei whereas the dragon nation readies for more agricultural imports. However, the US Commerce Secretary Wilbur Ross is less optimistic of the next week’s trade meeting in Beijing.
Absence of major data/events on the economic calendar will push investors to follow trade/political headlines for fresh impulse.
Technical Analysis
While 21-day exponential moving average (EMA) limits the pair’s immediate downside around 0.6690, July 0.2 low around 0.6655 becomes even stronger support should price decline further. On the upside, 200-day EMA level of 0.6716, followed by 0.6755/60 and the month’s high around 0.6790, can question the buyers.
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