NZD/USD nears 10-month old support-line with all eyes on RBNZ

• NZD/USD remains modestly unchanged as soothing trade tension confronts sluggish GDT Price Index.
• Traders also remain nervous ahead of the key RBNZ while prices near medium-term support-line.

Following a volatile day where respite in trade war concerns confronted weaker than expected New Zealand GDT price index, NZD/USD begins the RBNZ day on a back foot while making the rounds to 0.6525 at the start of Wednesday’s Asian session.

While global risk-off receded during Tuesday after China’s People's Bank of China (PBOC) set a tad lower rate for the USD/CNY, downbeat GDT Price Index of -2.6% versus -1.1% forecast kept the Kiwi away from gains. As a result, the Kiwi remained mostly unchanged on Tuesday.

Carrying the stalemate forward is the traders’ risk aversion ahead of the key Reserve Bank of New Zealand (RBNZ) meeting whereas in the central bank is all but certain to announce a 0.25% rate cut.

Even if the rate cut is mostly priced-in, yesterday’s second-quarter employment data from New Zealand makes today’s monetary policy meeting even more interesting to witness clues of how far the doves are ruling under the Governor Adrian Orr. With this, RBNZ’s quarterly monetary policy statement and Governor Orr’s speech after the rate announcement will also be the key to follow for fresh impulse.

Elsewhere, the economic calendar doesn’t offer much to follow, which in turn highlights trade news to dominate price moves after the RBNZ.

Technical Analysis

Nearness to ten-month-old support-line, at 0.6500, ahead of the key event makes traders even more nervous as a break of which could quickly drag the quote to May low of 0.6480 ahead of highlighting 0.6465 and the year 2018 bottom close to 0.6425. However, an upside bounce needs to clear July 10 low near 0.6567 to aim for 21-day exponential moving average (EMA) level of 0.6613.