- Trump’s decision to delay new tariffs on Chinese products provided an early lift.
- Reviving safe-haven demand seemed to be the only factor weighing on the Kiwi.
- Traders now look forward to the ECB decision/US CPI print for a fresh impetus.
The NZD/USD pair quickly retreated around 20-pips during the early European session, albeit has still managed to hold with modest daily gains around the 0.6430 region.
Having shown some resilience near the 0.6400 handle over the past two trading session, the pair caught some fresh bids on Thursday after the US President announced to delay a planned tariff hike on Chinese goods by two weeks. This comes on the back of China’s offer to buy more US agricultural products and remained supportive of the early up-move.
Downside seems limited ahead of ECB/US CPI
Apart from encouraging trade-related developments, a modest US Dollar pullback from one-week tops further collaborated to the pair’s intraday positive momentum to the highest since mid-August. However, reviving safe-haven demand, which tends to drive flows away from perceived riskier currencies – like the Kiwi, kept a lid on any further up-move.
Meanwhile, the downside is likely to remain limited, at least for the time being, as investors are likely to await a fresh catalyst from the latest ECB monetary policy decision. This coupled with the release of US consumer inflation figures might influence the USD price dynamics and produce some meaningful trading opportunities later this Thursday.
Hence, it will be prudent to wait for a sustained break below the 0.6400 round figure mark before confirming that the recent bullish trajectory has already run out of the steam and positioning for any meaningful corrective slide ahead of the highly anticipated FOMC policy meeting on September 17-18.
Technical levels to watch