- NZD/USD is the mercy of the action in the NZD/JPY ahead of looming US tariff deadline.
- A close today above 0.6616 (previous day’s high) would confirm a bullish reversal.
The NZD/USD pair is taking cues from the action in the NZD/JPY cross as the anti-risk JPY has taken a center stage ahead of Trump’s China tariff decision.
At press time, the NZD/USD is flat lined on the day at 0.6588, having hit a low of 0.6573 earlier today and could soon rise above 0.66 as the NZD/JPY is recovering losses.
The JPY cross fell to 72.75 earlier today, the lowest level since Aug. 16, as the anti-risk Japanese currency picked up a bid on escalating US-China trade tensions – the Trump administration is likely to impose a fresh set of duties on $200bn ( £155bn) of Chinese goods later today, having levied 25% tariffs on $50 billion worth of Chinese exports in July.
The NZD/JPY could revisit the session low of 72.57 and may drop to fresh multi-month lows below the Aug. 13 low of 72.35, dragging the NZD/USD lower with it if the US imposes new tariffs.
On the other hand, a surprise delay could put a bid under the NZD/USD, although only a daily close above the previous day’s high of 0.6616 would confirm a bullish RSI divergence and open the doors to a stronger corrective rally.
NZD/USD Technical Levels
Resistance: 0.6620 (Aug. 24 low), 0.6688 (July 3 low), 0.6713 (50-day moving average)
Support: 0.6572 (support on the hourly chart), 0.6530 (Sep. 4 low), 0.65 (psychological level)
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