NZD/USD refreshes lows sub-0.6900 on dismal China trade

• USD selling stalls as USTs recover ground.
• Downbeat China trade data weighs.
• RBNZ rate decision in focus.

The NZD/USD pair stalled its tepid recovery near 5-DMA of 0.6916 and came under fresh selling pressure, following the release of weaker Chinese trade data.

NZD/USD: Will the buyers retain control?

The Kiwi ran through fresh offers and fell briefly below 0.69 handle, after the Chinese trade data disappointed markets and raised worries over China’s external demand amid a slight drop in the imports. China is New Zealand’s top export destination.

Moreover, risk-off sentiment amid weaker Asian equities and oil prices also dented the appetite for the higher-yielding NZD, while a sharp drop in the dairy prices, as reflected by yesterday’s NZ GDP price index data, continued to undermine the sentiment around the spot.

However, the retreat remained capped on the back of broad-based US dollar weakness, in the wake of reports of a delay in corporate tax reforms. Focus now remains on the US tax reform plans and RBNZ policy decision for fresh direction on the prices.

NZD/USD Levels to consider

The NZD remains supported above 0.6925/23 (daily pivot/ 5-DMA), below which 0.6897 (10-DMA) and 0.6875 (Nov 6 low) are key near-term downside areas. To the topside, a test of 0.6950 (psychological levels/ 20-DMA) due on the cards, which could open doors towards 0.6975/76 (classic R1/ Fib R2).