NZD/USD begins the week on a back foot around 0.6900 on mixed NZ trade data, Ukraine woes

• NZD/USD struggles to keep weekly gains on risk-aversion, mixed data.
• New Zealand’s Exports improved, Imports ease while trade deficit widened in February.
• Ukraine-led woes escalate, Russia pushes for surrendering Mariupol.
• PBOC interest rate decision, second-tier US data will entertain traders but risk catalysts are the key for fresh impulse.

NZD/USD fails to extend the weekly gains while flashing a downtick to 0.6890, around 0.6900 during early Monday morning in Asia. In doing so, the Kiwi pair justifies an increase in the yearly trade deficit while also bearing the burden of the recent challenges to market sentiment from the Ukraine-Russia front.

New Zealand Trade Balance dropped to $-837B from $-7.77B prior but improved on MoM to $-385M versus $-1126M previous readouts. The Imports and Exports data, however, also came in mixed as Imports declined to $5.88B from $5.92B prior whereas Exports rose past $4.88B previous readings to $5.49B.

Elsewhere, talks between US President Joe Biden and his Chinese counterpart Xi Jinping failed to offer any positive headlines over Ukraine. On the contrary, mentioning the Taiwan issue added to the risk-off mood.

It’s worth noting that geopolitical conditions in Mariupol worsened on Sunday with Ukraine and the Russian military using higher forces. “Russian and Ukrainian forces fought for control of the port city of Mariupol on Sunday, local authorities said, while Ukrainian President Volodymyr Zelenskyy appealed to Israel for help in pushing back the Russian assault on his country,” said Reuters.

On the other hand, RIA News quoted Russian Defense Military as saying, “Ukraine has until early hours of March 21 to give its answer on surrendering Mariupol.”

It should be observed that Friday’s downbeat US housing data and the Fed’s action in the last week kept equities firmer and weighed on the US Treasury yields, as well as the US Dollar Index (DXY).

That said, the latest bout of sour sentiment can weigh on the NZD/USD prices while the monetary policy meeting by the People’s Bank of China (PBOC) will also be eyed as an immediate catalyst. Following that, the US Chicago Fed Manufacturing Index for February will be important to watch.

Technical analysis

NZD/USD pair’s latest pullback from the 200-DMA, around 0.6915 by the press time, directs the quote towards the 100-DMA re-test, near 0.6805 at the latest. However, any further declines will be challenged by an upward sloping support line from January, close to 0.6750, as well as the 50-DMA level of 0.6738.

Meanwhile, recovery moves beyond the 200-DMA level of 0.6915 will be challenged by an upward sloping resistance line from January 13, at 0.6935 by the press time.