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  • NZD/USD maintains post-RBNZ momentum amid a lack of major drivers at home.
  • The US-China trade jitters continue with the latest messages from the US being the trade positive.
  • A light economic calendar keeps trade headlines on the driver’s seat, Hong Kong election also grabs market attention.

NZD/USD stays positive around 0.6412 at the start of the week’s Asian trading on Monday. That said, that the Kiwi pair keeps it near 0.6400 amid mixed trade developments between the US and China while a lack of major catalysts at home also restricts the pair’s moves.

The latest trade news cites increasing hopes of a phase one agreement with the United States (US) President Donald Trump saying that a deal with China was ‘potentially very close’. Also on the positive side could be the Bloomberg news suggesting China’s readiness to take a tough stand against copyright infringements, the key demand from the US, which could assure the Trump administration about Beijing’s seriousness to the issue. However, concerns about Hong Kong, as raised by the US national security adviser Robert O’Brien, raise tension surrounding the trade relations between the global superpowers.

On the other hand, the US Dollar (USD) benefits from the recent data flow suggesting quite an improvement in activity numbers. The greenback earlier took advantage of its safe-haven allure and a slew of upbeat comments from the Federal Reserve (Fed) officials.

Markets are now gearing up for another week with fewer data/events at home, except Trade and ANZ Business Confidence numbers, which in turn shifts focus on to the US-China headlines for fresh impulse.

It should also be noted that the Reserve Bank of New Zealand (RBNZ) has recently refrained from conveying its dovish bias and any strong recovery in data/trade sentiment could be well portrayed by the kiwi pair.

Technical Analysis

100-day Exponential Moving Average (EMA) and a three-week-old downward sloping trend line could keep pair’s recovery under check around 0.6425 and 0.6435 respectively. As a result, quote’s declines below the 21-day EMA level of 0.6390 highlights nearly two-month-long rising support line, at 0.6335 now.