NZD/USd bulls struggle at the 0.68 handle
- There has been a switch up in trajectory for the antipodes with the Kiwi and Aussie drifting off their highs vs the greenback as we head towards the Chinese data as the main event for the Asian session.
- NZD/USD is currently trading at 0.6787, down from the US session high of 0.6813.
NZD/USD has been on the bid this week, recovering from last week's flash crash as the dollar slides due to the market pricing out Fed hikes and re-positioning for the return of the reflation trade. At the same time, Sino/US relations appear to be on track with President Donald Trump apparently keen to get a deal done soon in the hope it would help Wall Street recoup some of the steep losses suffered in recent times.
"Officials have until 1 March to reach a deal. Overall, the positive tone has provided risk with a much-needed shot in the arm, but caution remains over the hard-to-do aspects and the potential for these to cause another flare-up in the tit-for-tat dynamic that has prevailed in the past. China and the US are reportedly planning on releasing a joint statement Thursday morning in Beijing," analysts at ANZ Bank wrote.
As for data, on the domestic front, a survey from ANZ showed job advertisements fell 3.5 percent in December, from the previous month, pointing to some cooling in what has been a very strong labour market. Meanwhile, we look to data today from China in the form of CPI and PPI.
Support 0.6540 Resistance 0.6820
Bulls still struggle to hold the 0.68 handle. On a move higher, however, the 50% Fibo is located at 0.6929 guarding the December high of 0.6969. On the flip side, a break of the 100-D SMA at 0.6680 with daily closes will sure up the negative bias again, especially on a break back below the 23.6% Fibo.