- Doubts over the US-China trade talks in September question the NZD/USD pair’s post-RBNZ recovery.
- New Zealand Electronic Card Retail Sales be the only to decorate economic calendar.
- Trade news will be the key catalysts to watch for fresh impulse.
NZD/USD remains on the back foot around 0.6470 as Asian traders react to weekend’s trade news at the start of the new week.
After the White House Economic Advisor Peter Navarro said that he plans to call Chinese diplomats to the US for September talks, the US President Donald Trump’s tweet and the follow-on comment by the Global Times’ editor in-Chief Hu Xijin weigh on market expectations of the much-awaited trade talks in the coming month.
The US President Donald Trump tweeted that China wants a deal badly while the Global Times’ Hu criticized the US for bullying.
Read: China wants to reach a deal, but will always reject US bullying deal – Global Times
The tension between the US and China have recently been rising after the US took measures to further cut China’s Huawei from its business deals. The dragon nation, on the other hand, is also accused of limiting US agricultural imports.
It should also be noted that a 0.50% rate cut from the Reserve Bank of New Zealand (RBNZ) triggered the Kiwi pair’s slump last Wednesday.
While a lack of major data/events prevails on the global economic calendar, investors may keep focusing on the trade-related headlines for fresh direction. On the economic calendar, New Zealand’s July month Electronic Card Retail Sales will be on the spotlight with the MoM figures likely registering 0.6% growth versus 0.0% prior and the yearly numbers favoring 2.2% rise against 1.1% previous.
Technical Analysis
Despite recovering most of its post-RBNZ losses, the pair still fails to provide a daily closing beyond June month low around 0.6490, which in turn signal brighter chances of the pair’s pullback to Thursday’s bottom surrounding 0.6430 and then to 0.6400 round-figure. However, pair’s successful run-up above 0.6490, also crossing the 0.6500 round-figure might not refrain from expecting 21-day exponential moving average (EMA) level near 0.6570.
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