NZD/USD clings to near-term support-line heading into the key week

0
  • Overall greenback strength pushed the NZD/USD pair towards being the worst G10 pair.
  • Trade talks, Fed meeting adds importance to month-start week.

Following its decline to become the worst G10 pair of the week, NZD/USD traders modestly unchanged around 0.6630 at the start of the week’s Asian session on Monday.

Despite producing better than forecast trade numbers, the Kiwi couldn’t confront the King Dollar amid expectations of a less severe rate cut from the US Federal Reserve and upbeat Gross Domestic Product (GDP) data. Adding to the greenback strength were comments from the White House that they aren’t targeting a weaker Dollar; though, the US President Donald Trump, later on, refrained from accepting such remarks.

It should also be noted that sluggish prints of forward-looking Australian employment statistics and dovish comments from the Reserve Bank of Australia (RBA) Governor also weighed on the New Zealand Dollar (NZD) as Australia is the largest customer of New Zealand.

On the trade front, the US delegation of negotiators led by the Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin will discuss the matter for two days with Chinese diplomats starting Tuesday. Both the sides seem less energetic after a 3-month halt to talks.

Not only trade talks in Beijing but monetary policy meeting by the US Federal Reserve also increases the importance of the month-start week.

Moving on, the US Dallas Fed Manufacturing Business Index (July) becomes the only number to decorate the economic calendar, which in turn highlights the importance of trade/political news for traders to watch.

Technical Analysis

Prices seesaw between the 50 and 21-day simple moving average (SMA) level of 0.6625 and 0.6683 respectively. Adding strength to the downside is 6-week old support-line at 0.6630, a break of which can support sellers targeting sub-0.6600 area.

Get the 5 most predictable currency pairs

About Author

Comments are closed.