- NZD/USD trades near 0.6870 on early Monday.
- The pair initially rose to 0.6880 on upbeat NZ retail sales but couldn’t hold the gains after the US-China trade news broke.
- With 0.6880 resistance-line restricting immediate upsides, chances of the pair’s pullback to 0.6850 and 0.6815 can’t be denied.
The NZD/USD struggles around 0.6870 during initial Asian sessions on Monday. The pair trimmed early-day gains earned through welcome New Zealand retail sales growth after comments from the US President pleased global trade watchers.
During the day-start, the New Zealand Dollar (NZD) got a boost across the board as a quarterly reading of retails sales surged to a year’s high. The Statistics New Zealand reported that the retail sales grew 1.7% during the final quarter (Q4) of 2018 compared to upwardly revised 0.3% growth for the Q3. The report also mentioned that retail sales ex-autos increased 2.0% during Q4 2018 against 0.7% upwardly revised figure for the third quarter.
Following the NZD rally, tweets of the US President Donald Trump gained market attention. Trump lauded the US-China trade talks and showed readiness to postpone the March 01 deadline for increasing tariffs on Chinese imports which was later on confirmed by China’s official Xinhua news agency. Trump also showed likeliness to meet Chinese President Xi Jinping in Florida to give the final touch to the trade deal. The news improved broader risk-on sentiment and helped the US Dollar to register strength.
With this, the NZD/USD took a U-turn from the day’s high of 0.6880 to sub-0.6870 area. The pair now look forward to further details of how the world’s two largest economies manage to placate global tension.
While the trade deal is likely positive for the antipodeans, including the NZD, its initial support to the USD mainly because of market risk-on can’t be denied.
NZD/USD Technical Analysis
NZD/USD needs to clear the 0.6880 trend-line resistance connecting the recent highs marked in order to aim for the resistance-line joining December and February highs around 0.6935.
On the downside, 0.6850 and 0.6815 are likely nearby supports, a break of which can drag the pair further towards 0.6800.
Share
