• NZD/USD holds its strength as Fed policymakers keep their easing bias intact despite upbeat inflation numbers from the US.
  • The US-China trade war continues to look grim.
  • New Zealand Business NZ PMI, China Trade Balance are in the spotlight for now.

With the slew of dovish comments from the US Federal Reserve policymakers and the US President Donald Trump’s tweets raising further roadblocks for the US-China trade deal, the NZD/USD pair remains firm around 0.6660 at the start of the Asian session on Friday.

While the Fed Chair Jerome Powell reiterated his bearish wordings on the second day of Testimony, notable Fed policymakers like New York President John Williams and President of the Federal Reserve's Minneapolis branch Neel Kashkari added salvo to the US central bank’s dovish sentiment. However, markets seem to have priced for the show after Wednesday’s reaction.

Adding to the doubts surrounding less reaction to the Fedspeak could be upbeat inflation numbers from the US.

Exerting pressure on the momentum was the US President Donald Trump’s tweets that confirmed the latest speculations that China is stepping back from the US farm imports.

Moving on, June month New Zealand Business NZ Purchasing Managers’ Index (PMI) and China’s trade numbers will be in the spotlight of traders’ attention while keeping an eye over the trade-related news/headlines.

The New Zealand Business NZ PMI is expected to recover from 50.2 to 53.1 whereas China’s headline Trade Balance number could improve to $44.65 billion from $41.65 billion with likely upbeat imports to -4.5% from -8.5% and an expected drop in exports to -2.0% versus 1.1% previous readouts.

With New Zealand data just around the corner, TD Securities says:

With May BusinessNZ Manufacturing PMI falling to its lowest reading since Dec 2012 and the production component contracting sharply, the market will look to the June print for confirmation that manufacturing activity stalled in Q2.

Technical Analysis

Sellers seek a downside break of the 21-day exponential moving average (21-D EMA), at 0.6636 now, in order to aim for 0.6600 and latest low surrounding 0.6567 whereas bulls keep targeting 200-D EMA level of 0.6714 during further upside.