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  • NZD/USD remains pressured after stepping back from the one-month high on last Tuesday.
  • US dollar strength, challenges to risk keep the Antipodeans depressed.
  • China’s NBS Manufacturing PMI, New Zealand Building Permits came in better than forecast for October and September respectively.
  • China Caixin Manufacturing PMI, risk catalysts in the spotlight.

NZD/USD extends the downward trajectory to 0.6600 during the pre-Tokyo open trading on Monday. In doing so, the kiwi pair ignores upbeat data from China and home while declining for the fourth day in a row. The reason could be traced from the broad risk-off mood that mainly takes clues from the coronavirus (COVID-19) wave 2.0 and cautious sentiment ahead of the US presidential election.

Data matters less, for now…

With The Times conveying the UK ministers warning of a longer national lockdown than the recently announced final date until December 02, fears of the coronavirus (COVID-19) get stronger. The pandemic has already crippled major European nations and challenges the US economy after a bad hit in the first round. Although, COVID-19 cases from the Pacific nations have recently been negligible, market fears of a wider wave 2.0 can’t be ruled out.

While covid is already damaging the global economy, a delay in the US coronavirus stimulus and worries on whether the Democratic party will be able to retake controls of America add challenges for the market players.

As a result, traders ignore welcome numbers from China and New Zealand. On Sunday, China’s NBS Manufacturing PMI for October rose past-51.3 expected to 51.4 whereas New Zealand’s seasonally adjusted Building Permits for September grew beyond 0.2% revised prior to 3.6% on Monday’s release.

Risk catalysts like S&P 500 Futures drop near 1.0% by press time whereas the US dollar index (DXY) is currently wobbling around one-month high traders rush to risk-safety.

China’s Caixin Manufacturing PMI for October, expected to remain unchanged at 53.0, will precede the US ISM Non-Manufacturing PMI, forecast 55.6 versus 55.4 previous readouts, in directing near-term NZD/USD moves. However, virus updates and political headlines can keep the driver’s seat.

Technical analysis

Unless clearing the immediate resistance of 50-day EMA, at 0.6624 now, NZD/USD can’t avoid meeting the upward sloping trend line from September 24, currently around 0.6575.