- NZD/USD pulls back after a heavy decline amid trade-positive news.
- A light economic calendar keeps the market focus on trade/political headlines.
Following a downpour on Wednesday, the NZD/USD pair sellers seem to catch a breath as the quote bounces off recent lows to 0.6275 by the press time of early Thursday morning in Asia.
The Kiwi pair seems to have benefited from the trade signals provided by the US President Donald Trump during his latest press conference. The US President Trump said that China wants to make a deal. The statement can be read in conjunction with his previous note signaling an earlier than expected trade deal.
Antipodeans reacted positively to the news but the gains were capped by the Wall Street Journal’s news report signaling that the US levied sanctions on some top-tier Chinese firms for importing oil from Iran.
It should also be noted that the US Dollar (USD) witnesses pullback after rallying heavily as threats to the US President Donald Trump’s position are still alive, which in turn could help the commodity-linked currencies much amid trade-positive news/headlines.
The Kiwi pair couldn’t hold its post-Reserve Bank of New Zealand (RBNZ) meeting gains on Wednesday as the greenback dominated major currencies amid various trade/political catalysts. However, recovery in risk sentiment and trade-positive headlines are something that could have helped the commodity-linked currencies.
Given the absence of any major data/events up for publishing, investors will keep an eye over the trade/political headlines ahead of the US session where the Gross Domestic Product (GDP) and Fedspeak will add burden on analysts.
Technical Analysis
Bears await a break of recent low surrounding 0.6258 in order to aim for four-month-old falling trend-line near 0.6225/20 and 0.6200 support levels. Until then oversold relative strength index (RSI) could keep supporting the odds of the pair’s pullback to 0.6300 and 21-day simple moving average (SMA) level of 0.6345.
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