NZD/USD slides towards weekly low near 0.6200 amid six-day downtrend on mixed clues

• NZD/USD fades the previous day’s corrective bounce off weekly low, down for the sixth consecutive day.
• Downbeat sentiment, mixed headlines about China weigh on the Kiwi pair.
• US Dollar’s pause around weekly top, after rising the most in a month, prods pair sellers.
• Risk catalysts will be crucial for clear directions ahead of next week’s FOMC.

NZD/USD remains on the back foot at the intraday low of 0.6225 while reversing late Thursday’s corrective bounce off the weekly low amid the early Asian session on Friday. In doing so, the Kiwi pair justifies the market’s sour sentiment, as well as mostly downbeat headlines about China, while printing the six-day losing streak despite a lack of major data/events.

The risk appetite sours in Asia, tracing Wall Street, as downbeat US tech earnings join fears of higher US Treasury bond yields and the US Dollar to weigh on the NZD/USD price. That said, US Initial Jobless Claims dropped to 228K for the week ended on July 14, the lowest since May, versus 237K prior and 242K market forecasts but the Continuing Jobless Claims rose to 1.754M for the said period compared to market forecasts of reprinting 1.729M figures. Additionally, the Philadelphia Fed Manufacturing Survey gauge improved to -13.5 for July from -13.7 prior, versus -10 expected while Existing Home Sales slumped -3.3% MoM in June compared to 0.2% prior gain.

Previously, US Building Permits and Housing Stars also reported downbeat figures for June whereas the Retail Sales growth eased despite posting upbeat details of Retail Sales Control Group for June. Despite the recently upbeat US employment clues, the US statistics haven’t been impressive to support the Fed in announcing more rate hikes past July in the next week, which in turn can challenge the US Dollar bulls.

Against this backdrop, the Wall Street benchmark closed in the red while the S&P500 Futures also remain depressed after refreshing the yearly high on Wednesday. That said, the US Treasury bond yields refresh their weekly lows and prod the NZD/USD bears.

Elsewhere, fears of witnessing downbeat China growth join the People’s Bank of China’s (PBoC) efforts to defend the world’s second-biggest economy to prod the NZD/USD traders. Additionally challenging the Kiwi pair buyers are the PBoC Moves. The People’s Bank of China (PBoC) kept its benchmark Loan Prime Rates (LPRs) unchanged during Thursday’s Interest Rate Decision but took measures to lure global investment. With this, the one-year and five-year LPRs are held intact at 3.55% and 4.20% respectively while the cross-border funding adjustment parameter for firms was lifted to 1.5 from 1.25. The same allows the Chinese institutes to gain international funding with lesser hardships.

Moving on, a light calendar may allow the NZD/USD Price to consolidate the recent moves should the market sentiment improves. However, the cautious mood ahead of the next week’s monetary policy decision of the Fed may not allow the risk appetite to improve, which in turn can weigh on the Kiwi pair prices.

Technical analysis

A sustained downside break of a three-week-old rising trend line, around 0.6280 by the press time, directs NZD/USD bears toward the 200-DMA support of 0.6205.