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  • US Dollar Index stays in the red near mid-94s.
  • The U.S. is reportedly set to announce tariffs on China on Monday.
  • Empire State Manufacturing Index disappoints.

The NZD/USD pair extended its gains to a fresh daily top at 0.6591 during the American trading hours and struggled to preserve its bullish momentum. As of writing, the pair was trading at 0.6580, adding 0.5%, or 33 pips, on the day.

The pair’s recent rise seems to be the product of a broad-based USD weakness. After failing to break above the 95 mark on Friday, the US Dollar Index started the week under a mild bearish pressure and edged lower in the early NA session after the data released by the Federal Reserve Bank of New York showed that the business activity in the manufacturing sector in the NY area expanded at a slower pace than anticipated. At the moment, the index seems to have steadied near mid-94s, where it’s down 0.45% on a daily basis.

Meanwhile, investors are keeping a close eye on the headlines related to the U.S. – China trade conflict. Citing sources familiar with the matter, Bloomberg today reported that the White House could announce 10% tariffs on $200 billion worth of Chinese imports as early as Monday. Currencies sensitive to China such as the NZD and the AUD recorded limited against the dollar when compares other major currencies.

The next important event for kiwi will be tomorrow’s GDT auction. The last two auctions revealed a decline in GDT price index and a similar result is likely to weigh on the demand for the NZD.

Technical levels to consider

The pair could encounter the first resistance at 0.6615 (Sep. 6 high) ahead of 0.6660 (50-DMA) and 0.6725 (Aug. 28 high). On the downside, supports could be seen at 0.6540 (daily low/Sep. 14 low), 0.6500 (psychological level/Sep. 11 low) and  0.6460 (Feb. 2, 2016, low).  

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