Key Moments
- NZD/USD trades around 0.5850, marking a third straight session of losses during Asian trading on Tuesday.
- China’s August imports rose 28.2% year-over-year, missing expectations for 30% growth and pressuring the New Zealand Dollar.
- Broader US Dollar softness limits downside in NZD/USD, even as markets price a greater than 60% chance of a September Fed rate hike.
China Data Pulls NZD Lower
NZD/USD continues to edge lower for a third consecutive session, trading near 0.5850 during Asian hours on Tuesday. The New Zealand Dollar remains under pressure following the latest trade figures from China, New Zealand’s key export destination.
China’s August Trade Balance came in at $119.09 billion, broadly in line with expectations and above July’s $112.5 billion surplus. Export growth accelerated to 25% year-over-year, up from July’s 23.9%. However, the import side of the release disappointed markets.
| China Trade Metrics (August) | Latest | Previous | Market Expectation (where stated) |
|---|---|---|---|
| Trade Balance | $119.09 billion | $112.5 billion | – |
| Exports (YoY) | 25% | 23.9% | – |
| Imports (YoY) | 28.2% | 27.5% | 30% |
Imports grew 28.2% year-over-year, slightly above July’s 27.5% increase but below the 30% rise anticipated by markets. This softer-than-expected import performance is weighing on the Kiwi, reflecting the tight trade linkage between New Zealand and China.
US Dollar Weakness Helps Contain Losses
Despite the NZD’s reaction to Chinese data, further downside in NZD/USD appears limited for now by a generally weaker US Dollar backdrop. The Greenback’s softness is acting as a partial offset to the negative impulse from China.
At the same time, the US Dollar could find support if expectations for tighter Federal Reserve policy continue to build. Market participants are currently pricing in a probability above 60% for a Fed rate hike in September, supported by a solid August US labor market release.
US Nonfarm Payrolls increased by 162,000, while the Unemployment Rate remained unchanged. Investors are now focused on upcoming US Producer Price Index and Consumer Price Index data later this week, which may influence expectations around the Fed’s next policy decision.
Technical Picture: Bearish Tone Persists
On the daily timeframe, NZD/USD is trading near 0.5850 and maintains a bearish short-term bias as price holds below both the 50-day and nine-day Exponential Moving Averages (EMAs). The 14-day Relative Strength Index has slipped toward the low-40s, indicating waning bullish momentum rather than an outright oversold condition. This backdrop implies that rallies are likely to encounter selling interest while the pair remains capped beneath these key moving averages.
| NZD/USD Technical Levels | Level |
|---|---|
| Spot (daily) | 0.5850 |
| Immediate resistance – 50-day EMA | 0.5867 |
| Next resistance – 9-day EMA | 0.5887 |
On the upside, initial resistance stands at the 50-day EMA around 0.5867, followed by the shorter-term nine-day EMA near 0.5887. A daily close above this upper band would be required to start easing the current downside bias.
On the downside, the absence of nearby structural support zones leaves NZD/USD exposed to additional weakness. The subdued RSI profile, together with a softer FXS Fed Sentiment Index backdrop, reinforces the risk of renewed declines if buyers fail to reclaim and hold above the cluster of EMAs overhead.
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