- NZD/USD halts two days of gains, remains subdued on the day, weighed by poor trade surplus data and thin liquidity ahead of FOMC.
- Data released early today showed NZ trade surplus missed expectations. Trade surplus came in at 117m vs +401m expected and the prior was 339m.
- Exports were 4.20bn vs the expected 4.65bn and prior 4.25bn, while imports came in as 4.09bn vs the expected 4.28bn and prior 3.91bn.
- RBNZ is the main risk event for the week. Economists are divided but leaning towards no change from the RBNZ on Thursday morning.
- However, markets are pricing a 30% chance of an easing on Thursday, and a sharp move in NZD likely either way.
- Traders cautious heading towards the key FOMC policy decision, largely ignore strong rebound in oil prices overnight following bullish API weekly inventory report.
- Technicals are biased lower. NZD/USD has broken minor trendline support at 0.6890 and is on track to test 0.6840 levels.
- 4H cloud weighs on the upside and pair is capped below 10-DMA on the daily charts.
Recommendation: Good to sell rallies around 0.6885/90, SL: 0.6910, TP: 0.6850/0.6840
