NZD/USD confronts 50-day SMA as USD remains on the back foot
- The Kiwi pair continues to take advantage of the US Dollar (USD) weakness.
- The US-China trade stalemate holds the spotlight.
- New Zealand Credit Card Spending could offer fresh impulse but major attention will be given to Wednesday’s RBNZ.
Despite witnessing dearth of catalysts for the New Zealand Dollar (NZD), the NZD/USD pair holds its strength as it confronts the 50-day SMA level of 0.6591 at the start of the week’s Asian trading session on Monday.
The Kiwi pair managed to take advantage of the USD’s worst week in a year while on and off signals concerning the trade negotiations between the US and China seemed to have grabbed less attention from the Antipodeans buyers.
The greenback couldn’t avoid the bears after the US Federal Reserve finally appreciated rate cut expectations. Additionally, following second-tier data and risk-off moves also played their parts to drag the currency downwards.
Recently, China’s Global Times reported that FedEx, one of the leading US firm, is likely to be added to China’s ‘unreliable entities list’. This should have negatively affected the Kiwi pair as the dragon nation is risking trade negotiation with the US, which in turn can have an adverse impact on the commodity front due to the nation’s status of world’s largest industrial player. However, Kiwi bulls seem in no mood to buy the news.
Moving on, May month Credit Card Spending from New Zealand is likely an immediate directive for the pair trades. The early signal for economic activity is expected to have grown by 5.4% versus 4.5% prior on YoY basis.
On the other hand, the Chicago Fed National Activity Index for May and Dallas Fed Manufacturing Business Index for June can also entertain momentum traders. While the activity gauge from the Chicago Fed is expected to come in as -0.37 against -0.45 previous, the Dallas Fed index could recover to +4.8 from -5.3 earlier.
It should, however, be noted that Wednesday’s monetary policy meeting by the Reserve Bank of New Zealand (RBNZ) becomes the main catalyst for the pair.
Buyers can look for a sustained break of latest high around 0.6606 in order to challenge the current month top surrounding 0.6682. Though, a downside break of the 21-day simple moving average (SMA), at 0.6588 now, can recall 0.6510 and 0.6480 back to the chart.
This article is published only for general use basic informatory purposes and should not be considered or depended on as a financial or investment advice. Investors should make sure that they understand the risks and seek independent financial advice at all times. CFDS ARE COMPLEX INSTRUMENTS AND COME WITH A HIGH RISK OF LOSING MONEY RAPIDLY DUE TO LEVERAGE.