Search ForexCrunch
  • Trump is said to introduce new tariffs if talks with China fail.
  • Today’s inflation report from the U.S. confirms December rate hike.
  • US Dollar Index retreats from highs.  

Despite the latest headlines surrounding the trade conflict between the United States and China, the NZD/USD pair continues to trade sideways in its daily range and was last seen virtually flat on a daily basis at 0.6530.

Citing sources familiar with the matter, Bloomberg reported that the Trump administration was planning to roll out a new round of tariffs on $257 billion worth of Chinese good if talks between presidents Donald Trump and Xi Jinping were to fail to de-escalate the tension. Although the NZD generally comes under pressure on these types of headlines amid New Zealand’s trade relation with China, the pair stayed relatively quiet as the greenback’s recent weakness offset any potential gains.  

After today’s data from the United States showed that the annual core PCE price index, the Federal Reserve’s preferred measure of inflation, came in at the target rate of 2% to match the analysts’ estimates and the previous month’s reading, the US Dollar Index advanced to a fresh daily high at 96.70 before losing its traction in the second half of the NA session. As of writing, the DXY was still up 0.25% on the day at 95.55.

There won’t be any macroeconomic data releases from New Zealand, but the reaction of Asian equity indexes to China news could impact the kiwi’s market valuation.  

Technical levels to consider

The pair could face the first resistance at 0.6560 (50-DMA) ahead of 0.6610 (Oct. 21 high) and 0.6640 (100-DMA). On the downside, supports are located at 0.6505/00 (daily low/psychological level), 0.6460 (Oct. 26 low) and 0.6420 (Oct. 8 low).