NZD/USD drops as a slump in China’s imports supersede trade surplus
- NZD/USD drops to a nine-day-old rising trendline after China trade balance data.
- RBNZ’s Bond purchases, uncertainty surrounding the US-China trade deal also weigh on the Kiwi pair.
With a slump in China’s September month imports taking over trade surplus, NZD/USD extends early-day pullback to 0.6300 amid Monday’s Asian session.
China’s US Dollar (USD) denominated trade figures follow the Chinese Yuan (CNY) numbers while posting an 8.5% YoY drop in Imports versus -5.2% expected and -5.6% prior. As a result, investors shrug off better than forecast $33.30B Trade Balance to $36.65B while also respecting -3.2% Exports against -3.0% forecast and -1.0% previous readouts.
Read: China September Dollar-denominated imports drop 8.5%
Adding to the downside momentum is recent news that the Reserve Bank of New Zealand (RBNZ) initiates bond purchases while China’s rejection of the US diplomat’s visa adds to the fears of another US-China trade war and also weighs on the sentiment.
Following the trade-positive announcement on Thursday, Antipodeans have been on the recovery mode. However, weekend headlines raised questions about optimism and hence prices recently witness a pullback supported by the data from the key customer.
Investors will now look forward to fresh trade headlines as no major data/event is left for publishing while the United States (US) markets are off for Columbus Day Holiday.
Technical Analysis
Sustained trading below short-term rising trendline, at 0.6300, could recall 0.6276/70 support-zone including lows marked on September 03, October 10 and also comprising October-start highs. Alternatively, pair’s successful rise above 50-day Exponential Moving Average (EMA) level of 0.6373 can propel prices towards 0.6400.