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Firmer Start, Trade Balance On Tap

NZD

NZD/USD prints at $0.5930/35, the pair is ~0.1% above Friday's closing levels amid thin liquidity on Monday.

  • There is no obvious headline driver for the bid, news of further potential stimulus from China as the PBOC and financial regulators told lenders to boost loans to support a recovery may be supporting kiwi at the margins.
  • On Friday NZD/USD recovered off session lows as technical flows in USD/JPY spilled over into wider pressure on the greenback. The pair rose ~0.6% from trough to peak before paring gains to finish the session little changed.
  • Technically we remain in a strong downtrend, bears look to break the low from 17 Aug ($0.5903) which opens $0.5841 (low from 10 Nov 22) and $0.5783, a Fibonacci projection. Bulls look to regain the $0.60 handle to target the 20-Day EMA ($0.6039).
  • Cross asset wise on Friday the S&P500 was little changed as was BBDXY. 10 Year Tsy Yields fell ~3ps. WTI rose ~1.1% to $81.31 a barrel.
  • On the wires today we have Juily Trade Balance, there is no estimate for the print. Further out the data calendar is light this week with only Q2 Retail Sales ex Inflation due on Wednesday.

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