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  • NZD/USD remains on the back foot as risk aversion keeps traders away from the Antipodeans.
  • US officials expect trade talks in September but no confirmation from China.
  • New Zealand Food Price Index, the US Consumer Price Index (CPI) will provide fresh impulse.

With the global risk-off sentiment ruling the overall market, NZD/USD remains soft while making the rounds to 0.6445 at the start of Tuesday’s Asian session.

Not only protests in Hong Kong, which is now 10-weeks old and has resulted in airport shutdown off-late, but a surprise primary election victory of the anti-market candidate in Argentina also pleased safe-havens on Monday.

With this equities remained sluggish and bond yields plummeted with the US 10-year yield fell 10 basis points (bps) while the 30-year bond dropped to the lowest since 2016.

The US Security Advised John Bolton becomes the latest Trump Administration official to suggest that there will be a trade negotiation round as planned in September. However, China is mute about the same.

The global economic calendar has started taking the heat after a calm Monday. July month New Zealand Food Price Index will be the closest release to watch with the US CPI for July likely driving markets afterward.

Recently released data of New Zealand’s REINZ House Sales for July says that Home Sales grew 3.7% (YoY) versus -.3.8% prices.

While food price data could follow the footsteps of hosing numbers and please Kiwi buyers initial after likely increase of +0.4% versus -0.7% earlier drop, persistence risk-off sentiment can keep exerting pressure on the prices. On the other hand, the US inflation numbers might also become an additional burden for the quote if matching the upbeat market consensus.

Technical Analysis

Traders should be on the lookout for 21-day exponential moving average (EMA) level of 0.6560 if the quote rallies beyond June month low of 0.6487, if not then chance of witnessing 0.6430 and 0.6378 back on the chart can’t be denied.