AUD/NZD remains positive around 1.0430 as NZ trade deficit widens

• The AUD/NZD pair trades near 1.0430 on early Wednesday.
• The pair holds earlier gains after NZ trade balance widened more than forecast.
• Developments surrounding the US-China trade talk can provide near-term direction to the pair.

AUD/NZD maintains previous strength by trading near 1.0430 during the early Asian session on Wednesday. The pair gained strength earlier as receding risk off playing well in favor of the Australian Dollar (AUD). The gains recently were carried forward after New Zealand’s monthly trade balance data signaled higher than forecast trade deficit.

Declining chances of a no deal Brexit after the UK PM Theresa May’s parliament appearance and absence of any negative comments from the Fed Chair Powell’s testimony and the British inflation report hearings put the risk-on active during Tuesday. The AUD is often considered as a barometer of risk sentiment and increases at the time of optimism. As a result, the AUD/NZD pair managed to post a fresh high of the present week on Tuesday.

At the start of Wednesday, Statistics New Zealand released January month trade balance details. As per the outcome, monthly trade balance figure declined more than $-300 million forecast to $-914 million whereas the YoY number slid to $-6.36 billion from $-6.11 billion prior (revised) and $-5.46 billion market consensus.  

Looking forward, lack of economic data from either AU or NZ may grab market attention back to developments surrounding the US-China trade deal. Details of the Trump-Xi meet are still to be delivered and the trade accord is yet not final, which in-turn continue highlighting the trade talks as a risk event for the market.

AUD/NZD Technical Analysis

AUD/NZD needs to cross five-week-old trend-line resistance, at 1.0470 now, in order to justify its strength in targeting the 1.0500 round-figure.

Meanwhile, 1.0400, 1.0385 and 1.0365 are likely nearby supports for the pair traders to watch.