- NZD/USD fails to extend the previous day’s corrective pullback on downbeat NZ QSBO data.
- New Zealand’s Q2 NZIER Business Confidence slumped to the weakest since March 2020.
- Market sentiment also recalls the previous pessimism after US holiday teased bulls.
- China Caixin Manufacturing PMI, RBA will be in focus.
NZD/USD sellers attack 0.6200, after a positive start to the week, on disappointing New Zealand (NZ) sentiment data, as well as the return of full markets, during Tuesday’s initial Asian session.
That said, NZIER Business Confidence slumped to the lowest levels since March 2020, to -65% versus -40% expected, during the second quarter (Q2) of 2022.
The NZ data also joins the return of risk-aversion amid the full markets, after the US holiday allowed bears to catch a breather the previous day.
It’s worth noting that the hopes of the US tariff relief to China and improvement in the Bund yields also underpinned the NZD/USD pair’s corrective pullback the previous day. However, the recession fears and China’s covid woes joined Russia’s claim of winning total control in Lysychansk, which appears to have probed the pair buyers.
Additionally favoring the Kiwi pair’s corrective pullback was news suggesting hawkish expectations from the Reserve Bank of New Zealand (RBNZ) amid bullish forecasts over dairy prices, as well as upbeat inflation woes.
Moving on, NZD/USD traders will pay attention to China’s Caixin Services PMI for June, expected 47.3 versus 41.4 prior, as well as risk catalysts, for intermediate directions ahead of the Reserve Bank of Australia’s (RBA) monetary policy decision. Given the hawkish hopes from the RBA, the quote may track AUD/USD moves on the widely anticipated 0.50% rate hike.
Technical analysis
NZD/USD rebound needs to cross the one-month-old resistance line, around 0.6235 by the press time, to convince buyers. Until then, the downward trajectory towards refreshing the multi-month low marked the last week, near 0.6145, can’t be ruled out.