NZD/USD holds on to recovery gains amid trade positive headlines
- NZD/USD extends pullback from the multi-year low.
- The US President and Treasury Secretary turn down US-China trade pessimists.
- A lack of data/event emphasizes trade headlines for fresh impulse.
With the recent trade-positive headlines from the US, the NZD/USD pair takes the bids to 0.6300 at the start of Tuesday’s Asian session.
The US Treasury Secretary Steve Mnuchin conveyed the message of Chinese Vice Premier’s US visit in the next week. Mr. Mnuchin also said that the Chinese delegation’s delayed visit to the US farm was due to the request from the US-side.
Adding to the trade optimism was the US President Donald Trump’s statement that China has committed to buy a lot of agricultural goods from the US.
With this, the Kiwi pair extended its earlier recovery from multi-year lows. Though, a lack of major drivers and an early Asian session limits the pair’s performance by the press time.
The Kiwi pair recovered from September 2015 lows and turned out to be the major currency pair gainer on Monday. The reason could be the US and Chinese headlines trying to calm the pessimists smelling something fishy out of the Chinese delegation’s early leave from the US, needless to mention about canceling the previously announced farm visit.
It should also be noted that the New Zealand Dollar (NZD) beat the US Dollar’s (USD) across the board strength at the week-start. The greenback benefited from upbeat purchasing managers’ index at home, a contrast to the disappointing numbers from the EU, together with dovish comments from the European Central Bank (ECB) President Mario Draghi in his testimony.
Looking forward, no major data/event is up for publishing on Tuesday, which in-turn highlights trade/political news. However, speech from the Reserve Bank of Australia (RBA) Governor Philip Lowe at the Armidale Business Chamber Dinner, New South Wales, will be observed as Australia is the largest customer to New Zealand.
Technical Analysis
The 10-day simple moving average (SMA) and mid-month low surrounding 0.6340 becomes immediate upside barrier to watch before expecting pair’s further run-up towards 0.6410 and monthly top nearing 0.6450. Alternatively, a downside break of 0.6250 can again shift market focus to multi-month old falling trend-line support, at 0.6225 now.