NZD/USD: Pressured Below 0.6650 Amid Mixed Data at Home, Risk Challenges

• NZD/USD stays depressed after stepping back from a three-week top the previous day.
• New Zealand’s Food Price Index slumps 1.0% in August, Electronic Card Retail Sales rallied 7.3% YoY in September.
• Fresh news showing Sino-American and Aussie-China jitters join virus woes and vaccine hopes to confuse traders.
• China's trade numbers, risk catalysts will be the key.

NZD/USD remained mostly choppy around 0.6650 ahead of the recent drop to 0.6631 during Tuesday’s Asian session. In doing so, the kiwi pair traders might have been finding it difficult to justify the mixed trade numbers and risk catalysts published off-late.

Nothing clear ahead of China data…

Not only the lack of uniformity in New Zealand’s second-tier housing, retail and inflation data but different signals from the news concerning China, the US and Australia also challenges the NZD/USD traders. New Zealand’s REINZ House Price Index for September eased from 1.9% forecast to 0.2% MoM in September whereas Electronic Card Retail Sales rallied 7.3% versus 0.5% forecast and -0.8% prior during the stated month. Additionally, the Food Price Index for August dropped below 0% expected and +0.7% previous readouts to -1.0% MoM.

On the other hand, China’s ban of Aussie coal and harsh criticism of the White House proposal to three sales of advanced weaponry to Taiwan challenge the market’s risk sentiment. Also in the line could be the warnings from the US Health Official Anthony Fauci who expects the worst is ahead for America, as far as the coronavirus (COVID-19) is concerned.

Talking about the positive, US President Donald Trump finally tested COVID-19 negative for the consecutive day after getting infected during the last week. Following the news, the White House leader crossed wires, via Reuters, while said that the virus vaccine will soon be out.

On Monday, global markets cheered the People Bank of China’s (PBOC) removal of the FX risk reserve ratio and hopes of stimulus kept Wall Street positive, backed by a rally in the tech shares. The move ignored US House Speaker Nancy Pelosi’s rejection of Trump’s $1.8% stimulus offer.

Moving on, China’s September month trade numbers will offer immediate direction to the pair, together with the risk factors, whereas the return of the US traders from the long weekend and the Congress development concerning the American aid package will be the key afterward.

Technical analysis

A confluence of 21-day and 50-day SMA around 0.6630 offers immediate support to the pair ahead of the 100-day SMA near 0.6560. On the contrary, buyers are less likely to enter unless witnessing a clear break above 0.6675.