NZD/USD: turning higher in descending bearish channel, eyes on 0.6850

• On the wide, while below the key 200-month moving average resistance at 0.7007 longer term technicals remain bearish.
• Traders will await the Asian session and will have eyes on how Chinese markets perform ahead of European and US traders returning.  

NZD/USD drifted sideways just above 0.6760 while  the US out for Independence Day. The bird was consolidating yesterday’s modest relief bounce as analysts at ANZ noted, arguing that it could very well remain quiet today ahead of the FOMC minutes and non-farm payrolls. In the background,  the poor outcome in the GDT price index casts a dark cloud over the bull’s recovery attempts  and the lull on industrial metals should also anchor the bird.  Currently, NZD/USD is consolidating in a sideways range at 0.6763 between  0.6749, (as of Tokyo open), and 0.6783, (the European session early high).

So far, however, the bulls have been able to  shrug  off the trade war headwinds, even as  China has  planned to begin imposing tariffs on $34 billion of U.S. goods. These are set to kick in 12 hrs before  the Trump administration’s tariffs on up to $50 billion in Chinese imports are expected to be implemented.  Traders will await the Asian session and will have eyes on how Chinese markets perform ahead of European and US traders returning and full calendar in terms of US events on the dollar side of the cross.  

The week ahead:

On Thursday in North America, we have the ADP private employment, initial jobless claims, ISM non-manufacturing index and the FOMC minutes. Trader’s attention will then turn to the  U.S. nonfarm payrolls data and  the Chinese tariff threat that kicks on the same day.  

NZD/USD levels

Support 0.6680 Resistance 0.6850

0.6680 is the key support while 0.6850 is the first key upside target on a continuation of the reversal through the 200-hr SMA at 0.6801. Only a break above 0.6850 would alleviate the downside pressures and eyes remains towards 0.6675. On the wide, while below the key 200-month moving average resistance at 0.7007 longer term technicals remain bearish.