NZD/USD in search of a firm direction, US GDP eyed for fresh impetus

   “¢   Renewed uncertainty over US-China trade talks exerts fresh pressure.
   “¢   The prevalent risk-off mood adds to the weakness around the major.
   “¢   Weaker USD helps limit deeper losses ahead of today’s key US data.

The NZD/USD pair lacked any firm directional bias and seesawed between tepid gains/minor losses through the early European session on Thursday.

The pair held on the defensive below mid-0.6800s and was seen consolidating the overnight rejection slide from the 0.6900 handle, triggered by a goodish US Dollar rebound and renewed uncertainty over the US-China trade talks.

Adding to this, today’s disappointing release of the Chinese manufacturing PMI for February dented investors’ risk-appetite and further collaborated towards driving flows away from perceived riskier currencies – like the Kiwi.

The downside, however, remained cushioned amid a lack of any strong follow-through USD buying and a sharp fall in the US Treasury bond yields, which eventually led to a subdued/range-bound trading action on Thursday.

Moving ahead, today’s US economic docket, highlighting the release of advance US GDP growth figures and the Fed’s preferred measure of inflation – core PCE, will now be looked upon for some meaningful impetus.  

Technical levels to watch

A follow-through weakness below weekly lows, around the 0.6830 level, now seems to accelerate the fall further towards the 0.6800 handle before the pair eventually aims to challenge the very important 200-day SMA support near mid-0.6700s.

On the flip side, the 0.6860-65 area now seems to act as an immediate resistance, which if cleared might assist the pair to make a fresh attempt towards conquering the 0.6900 handle and head towards testing monthly tops, around the 0.6920 region.