NZD/USD: Buyers and sellers jostle around 0.6100 amid risk reset

• NZD/USD holds onto recovery gains from 0.6080.
• Absent of the US President Trump’s retaliation to China’s move over Hong Kong seems to have triggered the latest risk reset.
• Earthquake in New Zealand fails to get noticed amid a light economic calendar.

NZD/USD prints modest gains while trading around 0.6100 amid Monday’s initial Asian session. In doing so, the kiwi pair seems to have ignored the recent earthquake in near New Zealand’s capital while also emerging from the US-China tussle. The reason could be spotted in US President Donald Trump’s awaited response to Beijing move towards gaining more power in Hong Kong.

While US Secretary of State Mike Pompeo has already condemned China’s readiness to enact the national security legislation in Hong Kong, no words from President Trump probe the latest risk aversion wave.

Even so, the weekend protests in Hong Kong as well as a slew of criticism of Beijing’s moves by the Western world likely keep the market away from the risk-on.

Also adding to the cautious sentiment could be a 5.8 magnitude earthquake in New Zealand’s North Island close to the capital Wellington.

Furthermore, Global Times harsh comments, the US policymakers push to sanction Chinese diplomats involved in Xinjiang case add to the market’s risk-off sentiment. Also challenging the risks could be the bill that could restrict the Asian major’s companies from listing onto the American exchanges.

Amid all these catalysts, US 10-year Treasury yields drop two basis points (bps) to 0.657% whereas S&P 500 Futures gain over 0.30% to 2,963 by the press time.

Considering the lack of major data, as well as the US holiday, markets may keep searching for clues relating to the US-China tussle for fresh impulse.

Technical analysis

While buyers are less likely to enter unless breaking a 100-day EMA level of 0.6170, 50-day EMA near 0.6080 offers immediate support to the pair ahead of 0.6000 round-figure.