NZD/USD rebounds after slipping below 0.5900, as risk appette improves

• NZD/USD rises 0.17% despite lingering concerns over China's economic health and the PboC's rate cut.
• US equities show optimism with NVIDIA's earnings on the horizon, while the Greenback dips by 0.10%.
• Technicals suggest NZD/USD remains bearish, with potential to retest the YTD low; however, reclaiming the 0.6000 level could shift momentum.

The New Zealand Dollar (NZD) snapped eight days of losses against the US Dollar (USD), amidst a risk-on impulse, after China’s central bank cut rates on its 1-year Loan Prime Rate (LPR) aimed to stimulate its economy. Hence, the NZD/USD is trading at 0.5930, above its opening price by 0.17%.

New Zealand Dollar finds respite as China's central bank moves to stimulate its economy, with eyes set on upcoming key events

US equities are trading in the green as NVIDIA releases its earnings report on Wednesday. Even though China’s economic woes are lingering on traders’ minds, the NZD/USD recovers some ground after dropping to a new year-to-date (YTD) low of 0.5896. US Treasury bond yields climbed while the Greenback retreated 0.10%, as depicted by the US Dollar Index (DXY), at 103.322.

Developments throughout Monday’s Asians session weighed on the Antipodeans after the People’s Bank of China (PboC) cut rates on its 1-year Loan Prime Rate from 3.55% to 3.45%, disappointing analysts. As reported by Bloomberg, it’s said that PboC’s officials and government regulators told leaders to boost loans to support recovery.

Since antipodean currencies are seen as proxies to the Chinese Yuan (CNY), it plunged after the PboC’s headline crossed investors’ screens. However, the lack of meaningful economic data would leave traders adrift to sentiment, and US Dollar dynamics, with traders bracing for US Federal Reserve Chair Jerome Powell’s speech at Jackson Hole on Friday.

The New Zealand economic docket would feature Q2’s Retail Sales, which are expected to be mixed, with quarterly figures disappearing, contrary to the year-over-year improvement. On the US front, the agenda will feature Fed speakers, housing data, S&P Global PMIs, Durable Good Orders, unemployment claims, and the Federal Reserve (Fed) Chair Jerome Powell’s speech on Friday.

NZD/USD Price Analysis: Technical outlook

Gien the fundamental backdrop, the NZD/USD would remain downward biased, and it might test the YTD low of 0.5896. A daily close around the 0.5800 handle would expose the November 10 low of 0.5846, followed by the 0.5800 figure. A dip below would expose the November 3 low of 0.5740. Conversely, as buyers stepped in around 0.5900, if they reclaim 0.6000, the pair would test June’s 8 low turned resistance at 0.6031.

NZD/USD Price Action – Daily chart