Despite a recent lack of momentum, the NZDUSD is successfully maintaining its rebound from the yearly low of 0.59211 that occurred at the beginning of the week.

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• NZD/USD defends the week-start rebound from yearly low despite lacking momentum of late.

The pair currently trades last at 0.59211.

The previous day high was 0.5939 while the previous day low was 0.5894. The daily 38.2% Fib levels comes at 0.5922, expected to provide resistance. Similarly, the daily 61.8% fib level is at 0.5911, expected to provide support.

NZD/USD remains firmer around 0.5920, making rounds to intraday high ahead of Tuesday’s European session, as buyers cheer the US Dollar weakness but lack support amid a light calendar and mixed sentiment. Even so, hopes of witnessing more stimulus from the major customer China add strength to the Kiwi pair’s recovery moves.

China state media advocates early rate cuts from the People’s Bank of China (PBoC), which in turn suggests more money flow and favors the Kiwi buyers to keep the reins despite sluggish momentum. “The PBoC would cut the RRR to better maintain reasonable and ample liquidity,” said the analytical piece.

That said, the mixed updates about the US-China trade talks in Beijing join the International Monetary Fund (IMF) Director Kristalina Georgieva’s readiness to visit the senior leaders of China’s Communist Party prod the risk appetite and the NZD/USD buyers.

Also, New Zealand (NZ) Minister of Finance (FinMin) Grant Robertson flagged recession fears in the Pacific nation while urging the public service to cut spending on consultants and contractors, which in turn prods the NZD/USD bulls. The policymaker also added that he will also cut down the future budget allowances, per Bloomberg.

It should be noted that China’s halving of the stamp duty on stocks trading joined a Wall Street Journal (WSJ) piece suggesting Chinese Communist Party Chairman Xi Jinping’s indirect push for stimulus to favor market sentiment. On the same line were the global policymakers’ inabilities to please markets with a major hawkish surprise during the annual Jackson Hole Symposium.

Elsewhere, challenges for the global central bankers, due to the mixed data and looming recession woes, keep traders on their toes after the policymakers defended their respective hawkish practices at the last week’s Jackson Hole Symposium.

Amid these plays, US 10-year Treasury bond yields remain pressured around 4.19% while the US Dollar Index (DXY) also drops to 103.85 by the press time. It’s worth noting that the US two-year bond coupons reversed from the highest level since 2007 the previous day and remained depressed near 5.00% by the press time. Further, the S&P 500 Futures lack clear directions around 4,445 after rising in the last two consecutive days.

Moving on, the US Conference Board’s (CB) Consumer Confidence Index for August, expected at 116.2 versus prior 117.00, will be important for the pair trader to watch amid a light calendar elsewhere. More importantly, the risk catalysts, China news and this week’s China PMI, US Core PCE Price Index and NFP for August will be crucial for a clear direction for the NZD/USD pair.

NZD/USD buyers struggle with a six-week-old descending resistance line surrounding 0.5920 as the oversold RSI (14) line favors the corrective bounce.

Technical Levels: Supports and Resistances

NZDUSD currently trading at 0.5922 at the time of writing. Pair opened at 0.591 and is trading with a change of 0.20% % .

The pair remains strongly bearish on the daily time frame. It trades below the 20 SMA @ 0.5996, 50 SMA 0.6119, 100 SMA @ 0.6149 and 200 SMA @ 0.6226.

The previous day high was 0.5939 while the previous day low was 0.5894. The daily 38.2% Fib levels comes at 0.5922, expected to provide resistance. Similarly, the daily 61.8% fib level is at 0.5911, expected to provide support.

Note the levels of interest below:

• Pivot support is noted at 0.589, 0.5869, 0.5844
• Pivot resistance is noted at 0.5935, 0.596, 0.598

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