NZD/USD drops for fourth consecutive day, looks for clear direction near 0.6440
- NZD/USD fails to ignore coronavirus risk.
- Recently released New Zealand REINZ House Price Index couldn’t defy the pessimism surrounding the key customer.
- RBA minutes and the US traders’ return can be followed for intermediate direction.
NZD/USD remains under pressure around 0.6435 during the early Tuesday morning in Asia. The pair recently failed to cheer upbeat figures of New Zealand housing price gauge as worries emanating from China’s coronavirus keep exerting downside pressure on the kiwi.
The Real Estate Institute of New Zealand’s (REINZ) January month House Price Index grew beyond 0.50% MoM to 0.60% while rising 7.0% YoY. Even so, the markets aren’t cheering anything amid a lack of fresh direction from China.
The latest softness in coronavirus cases and the dragon nation’s efforts to placate traders seem to gain less popularity amid fewer signs that the epidemics are abating. China’s leading expert tackling the epidemic, Zhong Nanshan, recently mentioned that the coronavirus will peak later in February in South China. Nationwide, the disease is expected to reach its peak in April also weighed on the sentiment.
Also portraying the downbeat sentiment was the World Trade Organization’s (WTO) Good Trade barometer that slumped to 95.5 from 96.6 in November in its latest reading.
While the Reserve Bank of New Zealand (RBNZ) offered positive surprise with its hawkish halt, there has been a little positive for the pair to cheer afterward. Also, there are no major data from New Zealand scheduled for publishing during the week, which in turn keeps the traders on the lookout of external catalysts. In doing so, their major customers, namely Australia and China, will be the keys to follow.
It should also be noted that the US markets were off on Monday and limited the trade sentiment. As a result, following the RBA’s monetary policy minutes, up for publishing at 00:30 GMT, markets will also await the return of the US traders as well as the US Empire State Manufacturing Index for fresh clues.
Technical Analysis
Buyers will look for entry only if the NZD/USD prices sustain beyond a 200-day SMA level of 0.6400. Until then, the return of monthly low surrounding 0.6375 can’t be ruled out.