FxWirePro: NZD/USD dips as U.S. dollar recovers

• NZD/USD dipped on Monday  as US dollar recovered after suffering losses at the end of last week when U.S.-China trade tensions pressured emerging currencies.

• On Friday,Trump threatened 100% tariffs on Chinese imports and announced new software export controls from Nov. 1 in response to China’s rare-earth curbs.

•Despite his earlier tough talk, Trump sounded more conciliatory on China over the weekend, and analysts hoped the tariff threat was tactical and a compromise was possible.

• Beijing defended its actions on Sunday as justified but refrained from adding new tariffs on U.S. goods.

• The NZD/USD fell sharply last week after the Reserve Bank surprised markets with a larger-than-expected 50 basis point rate cut to 2.50%, its lowest level in over two years.

• Markets are pricing in an 85% chance of another RBNZ rate cut in November after last week’s 50 bps reduction to 2.5%.

•  Immediate resistance is located at 0.5788(38.2%fib), any close above will push the pair towards 0.5827(SMA 20).

•  Support is seen at 0.5717(23.6%fib) and break below could take the pair towards 0.5689(Lower BB).

 Recommendation: Good to sell around 0.5750 with stop loss of 0.5850 and target price of 0.5670