- NZD/USD pops and drops amid mixed headlines.
- US President Donald Trump said phase-one will be signed soon, China’s President Xi Jinping is concerned by the US interference in internal matters.
- Trade headlines could direct market sentiment amid a light economic calendar.
NZD/USD seesaws around 0.6600 amid the initial Asian trading session on Monday. The quote began the week on trade-positive comments from the US but failed to hold the gains after witnessing China’s downbeat response.
Read: What you need to know for the open: Risk on to support AUD/JPY’s bullish grind
The US President Donald Trump cited breakthrough in trade talks with China and signaled the phase-one deal will be signed soon. Though, Reuters relied on China’s Xinhua while saying that the Chinese President Xi Jinping, in a call with the US President, accused the United States of interfering in its internal affairs.
Read: Xi has accused the United States of interfering in its internal affairs
With this, commodity-linked currencies fail to cheer the likely risk-on as US-China political jitters weigh on the market’s risk-on sentiment. Even so, losses are limited as initial sealing of the phase-one by the US-China diplomats seem to support the overall positive mood.
Also supporting the New Zealand Dollar (NZD) strength are the recently positive data at home that cuts the odds of the Reserve Bank of New Zealand’s (RBNZ) aggressive rate cuts in 2020.
Markets are expected to remain sluggish during the holiday-shortened week but trade headlines could keep the traders entertained. On the economic calendar, today’s US Durable Goods Orders, Chicago Fed Manufacturing Activity Index and New Home Sales can offer an active US session.
Technical Analysis
Last week’s repeated pullbacks from 0.6615 portray Bulls’ exhaustion, which in turn highlights the importance of the 200-day Exponential Moving Average (EMA) level, near 0.6530 now, as the upcoming level to watch.
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