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NZD/USD clings to 0.6400 amid trade positive headlines

  • NZD/USD refrains from breaking 0.6400, while not rising much as well, amid trade optimism at the US and China.
  • US Treasury Secretary Mnuchin recently took a U-turn from the previously cautious statement.
  • New Zealand’s Business NZ PMI will become an immediate catalyst, with trade headlines holding the reins, ahead of the US consumer-centric data.

With latest statements from the US Treasury Secretary Steve Mnuchin setting the upbeat tone for the US-China trade relations, the NZD/USD pair takes the rounds to 0.6400 at the start of Friday’s Asian session.

Taking a U-turn from previous statements like the US President Trump is prepared to keep tariffs in place and raise them if necessary, Treasury Secretary Mnuchin recently mentioned that he is hopeful China trade talks will make progress.

The Kiwi pair wobbled on Thursday as speculations of an interim US-China trade deal was turned down after an initial boost to the Antipodeans. Prices were also affected due to the strong Core Consumer Price Index (CPI) data from the United States (US) as well as reaction to the European Central Bank’s (ECB) bazooka of monetary easing with 10 basis points (bps) of interest rate cut and open-ended QE of €20 billion per month starting  from November 1st.

New Zealand’s August month Business NZ Purchasing Manager Index (PMI) data, prior 48.2, just around the corner, investors will give lesser importance to other catalysts except the trade headlines. However, the US Retail Sales and Michigan Consumer Sentiment data in the later part of the day won’t lose their importance.

Technical Analysis

The pair keeps it above 21-day exponential moving average (EMA) level around 0.6400 so far since the week-start, which in turn increases the odds of its run-up to 50-day EMA level of 0.6475. Though, a sustained break above 0.6445 becomes necessary for that. In a case where prices dip below 0.6400, month-start high surrounding 0.6320 will flash on sellers’ radar.

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