- President Trump’s use of “threat before the deal” strategy troubles commodity-linked currencies.
- China’s reaction to the US President Trump’s tweet will be in the spotlight.
The NZD/USD pair seesaws near 0.6620 after it slumped to near 0.6600 mark on renewed doubts over the US-China trade deal during the early Asian session on Monday.
The Kiwi pair witnessed downside pressure at the start of the present week as traders reacted to the US President Donald Trump’s tweets that are likely to damage chances of the much-awaited trade deal between the world’s two largest economies.
Having been frustrated by “too slow” negotiations and China’s renegotiation strategy, as the tweets said, the President Trump threatened to levy tariffs on $200 billion Chinese goods, in addition, to include $325 billion into 25% duty category.
As China being the world’s largest commodity user, any negative news for its economy or concerning a big deal like this could disappoint antipodeans.
Traders may now look for April month Caixin services purchasing manager index (PMI) from China in order to get the fresh impulse. The service gauge is expected to decline to 52.8 from 54.4 prior.
Other than data, news surrounding how China reacts to the President Trump’s tweets will also be observed closely as lawmakers of both the nations are ready to meet for further talks during this week.
While 0.6590/80 area comprising lows since early January acts as important downside support, a break of which might not refrain from dragging the quote to 0.6570 and 0.6510 rest-points.
Alternatively, a downward sloping trend-line since late-March, at 0.6655, could restrict near-term advances of the pair ahead of shifting bulls’ attention to 0.6700 and 200-day simple moving average (SMA) near 0.6725.
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