- NZD/USD remains on the back foot around multi-year low as US-China trade war, sluggish data at home drag Antipodeans.
- China’s official PMI numbers fail to please commodity buyers.
- New Zealand’s Terms of Trade Index, China’s Caixin Manufacturing PMI decorate economic calendar when the US markets are off for the Labor Day.
Continuation of the US-China trade war and the presence of downbeat data at home and off-shore keep the NZD/USD pair under pressure while taking rounds to 0.6800 at the week-start trading of Monday’s Asian session.
The US tariffs on Chinese goods worth of $110 billion took place on September 01 even if China canceled previously announced tariffs to be levied this month while waiting for the trade talks. Chinese state media keep criticizing the US with the weekend news report from Xinhua giving lessons on the “US’ futile war”, as it said.
On the other hand, China’s official purchasing managers’ index (PMI) data for August, released over the weekend, showed little sign of progress. The headline Manufacturing PMI remained in the contraction region with 49.5 mark versus 49.7 expected and prior whereas Non-Manufacturing PMI crossed 53.6 forecast to 53.8.
Although US markets are closed due to Labor Day, trade headlines can keep investors busy at the month-start. On the economic calendar, New Zealand’s (NZ) second quarter (Q2) Terms of Trade Index and China’s Caixin Manufacturing PMI for August will be on the traders’ radar.
While NZ Terms’ of Trade Index isn’t expected to deviate from 1% previous readouts during the second quarter, China’s private manufacturing gauge could weaken a bit to 49.8 from 49.9.
Given the consecutive six weeks of decline towards late-2015 lows, the positive surprise from data can trigger month-start pullback especially when the US traders are away.
Technical Analysis
September 2015 lows surrounding 0.6236/43 seem immediate strong support ahead of highlighting 0.6200 round-figure and the year 2015 low near 0.6085. Meanwhile, 0.6340 and August 07 bottom around 0.6380 can keep exerting near-term downside pressure.
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