NZD/USD clings to 6-week low as aftershocks of Fed’s action keep pleasing bears

• The King Dollar holds its Fed-backed strength, dragging NZD/USD to multi-month low.
• The absence of major positives from home, trade front weighs on the Kiwi.
• China’s Caixin Manufacturing PMI will be in the spotlight for now.

NZD/USD seesaws near the 6-week low, printed after the previous day’s Fed rate cut, while making the rounds to 0.6560 at the start of Thursday’s Asian session.

Despite registering an initial pullback on the US Federal Reserve’s 0.25% rate cut, the greenback surged across the board as the Chairman Jerome Powell considered the present action as a mid-cycle adjustment while keeping a positive outlook towards the US economy.

The US President Donald Trump didn’t like the central bank’s not so dovish rate cut, as always, but the King Dollar showed little care for it.

On the other hand, the New Zealand (NZD) had ANZ sentiment numbers and doubts over the Shanghai deal, which later on turned true, as weighing on the prices during Wednesday’s Asian session. The US and China shook hands at the end of two-day-long trade negotiations without any major success, except for the talks being “constructive”, and said they will meet again in September.

Given the lack of data at home, Kiwi traders will now keep an eye over China’s Caixin Manufacturing Purchasing Managers’ Index (PMI), expected 49.6 versus 49.4 prior, while also following macro headlines.

Technical Analysis

Unless providing a successful run-up beyond July 10 low of 0.6567, fears of the pair’s dip beneath late-May tops, around 0.6560, can keep being on the card, which in turn divers sellers to the 10-month old ascending support-line, near 0.6510. Meanwhile, an upside break of 0.6567 can have 0.6600 and 0.6630 as follow-on numbers to please buyers.