- NZD/USD takes the bids to more than a three week high.
- The US Dollar (USD) carries Friday’s NFP-backed weakness forward.
- Trade optimism, hopes of China’s stimulus support Antipodeans.
With no trade negative and a sustained USD weakness, coupled with the hopes of China’s stimulus, NZD/USD extends its run-up to 0.6430 at the start of Tuesday’s Asian session.
The Kiwi pair have recently benefited from increasing odds of the US-China trade deal as both the nations have finally agreed to meet in October while Chinese Deputies will also travel the US around mid-September for consultations, as per the White House Advisor Larry Kudlow.
Adding to the pair’s gains are rising expectations for China’s further stimulus after the People’s Bank of China (PBOC) said it will cut the reserve requirements for financial institutions.
Furthermore, the US Dollar has been bearing the burden of Friday’s weaker than expected print of the Nonfarm Payrolls (NFP), with no major details/event offering any change in sentiment.
While updates surrounding the US-China trade deal will undoubtedly grab the spotlight, New Zealand’s August month Credit Card Spending and Electronic Card Retail Sales, followed by China’s inflation numbers, will be the key to decorate the economic calendar. It should also be noted that the US data line is thin, except July month’s JOLTS Job Openings, and can keep pushing the greenback to continue earlier momentum.
Technical Analysis
The 50-day exponential moving average (EMA) and May month low offer strong resistance around 0.6480/82, a break of which needs to be validated by June bottom surrounding 0.6490 in order to propel prices further beyond 0.6500. On the downside break of 21-day EMA level of 0.6406, the quote can revisit 0.6360 and 0.6330 rest-points.
Share
