NZD/USD traders struggle to justify soft data at home, weak USD

• NZD/USD trades near 0.6860 on early Wednesday.
• Soft food price index and weakness in the USD challenge the Kiwi traders.
• Developments surrounding the US-China trade deal and the US data will be in the spotlight for now.

The NZD/USD pair remains little changed around 0.6860 during initial hours of Asian trading on Wednesday. The quote struggles to justify recent weakness in the US Dollar (USD) as domestic data are less in favor to extend the latest recovery. With lack of big details/events from New Zealand, developments surrounding the US-China trade talks and news/data reports from the US could direct near-term pair moves.

Statistics New Zealand released February month food price index (FPI) data on early Wednesday. The report reveals +0.4% inflation reading versus +1.0% prior. NZD/USD responded to the news with cold blood as the reading was still second best since August 2018 and recent data dossier from the US was also dragging the greenback down.

Be it Friday’s disappointing nonfarm payrolls (NFP) or Monday’s revised down retail sales, not to forget Tuesday’s softer than expected consumer prices index ex-food and energy, the US economics are dragging the greenback down.

Given the dearth of New Zealand statistics to observe looking forward, traders may concentrate more on the trade negotiation between the US and China together with the US data for fresh impulse. Recently, the US Trade Representative Robert Lighthizer said that the US is close to the much-awaited trade deal with China but few details still remain to be solved.

In the case of the US data, Wednesday’s durable goods orders and nondefense capital goods orders ex-aircraft can entertain short-term traders. The durable goods orders are likely to have registered negative growth figure of -0.5% during January versus +1.2% earlier increase whereas nondefense capital goods orders ex-aircraft may reverse earlier contraction of -1.0% with +0.1% mark during the month of January.

NZD/USD Technical Analysis

In addition to an immediate descending trend-line stretched since early February, at 0.6860, the NZD/USD pair may also find it hard to cross a downward sloping resistance-line ranging from June 2018 at 0.6925.

Alternatively, 0.6830 and 0.6790 are likely immediate supports to watch ahead of observing 200-day simple moving average (SMA) near 0.6745.