NZD/USD finds suppot near 0.64, posts modest recovery gains

• New Zealand’s bi-weekly GDT Auction yields 0.2% decline in Price Index.  
• US Dollar Index looks to snap five-day winning streak.
• US Pres. Trump calls upon the Fed to be proactive and cut interest rates.

The NZD/USD pair dropped to its lowest level in nearly two weeks at 0.6403 earlier today after China’s Commerce Ministry said that they were dissatisfied with the United States’ decision to  add 46 Huawei subsidiaries to the entity list while delaying the ban on Huawei to buy supplies from US companies for 90 days. However, the broad-based selling pressure surrounding the Greenback in the second half of the day allowed the pair to stage a recovery and turn positive on the day. As of writing, the pair was up 0.2% at 0.6420.

Meanwhile, the bi-weekly Global Dairy Trade (GDT) auction  in New Zealand yielded a 0.2% decline in the GDT Price Index and made it difficult for the Kiwi to preserve its momentum.

USD weakness supports NZD/USD rebound

On the other hand, the US Dollar Index (DXY) is correcting its five-day long rally on Tuesday and is looking to close the day in the negative territory as markets are getting ready for the FOMC to publish the minutes of its August meeting tomorrow. Although there were no macroeconomic data releases from the US today, the sharp drop in the Treasury bond yields seems to be weighing on the currency.

Commenting on the US-China trade dispute, US President Trump repeated that he was not ready to make a deal yet and said that they had to ‘take China on’ whether it was good or bad for the US in the short-term. Trump also called upon the Federal Reserve to be proactive and cut the policy rate. At the moment, the DXY is down 0.2% on the day at 98.17.

Technical levels to watch for