After the NZD/USD currency pair failed to break through 0.6350 in Asia, there has been a lot of pressure to sell. China’s National Bureau of Statistics (NBS) released insufficient Trade Balance data, resulting in market traders selling off the asset.

Exports went down 8.6% instead of 3.5%, and imports went down 10.6% instead of 6%. The trade balance of China went down from $78.1B to $69.84B. China’s biggest trading partner is New Zealand, so a wrong China Trade Balance hurts the New Zealand Dollar.

In the meantime, people have become less willing to take risks and more interested in safe investments. After falling to about 105.50, the US Dollar Index (DXY) went up and is likely to exceed the four-day high of 105.69. After Tuesday’s drop, S&P500 futures are stuck in a narrow range, which shows that people are afraid to take risks. The yield on a 10-year US Treasury is back above 3.5%.

Investors will keep an eye on China’s CPI on Friday. The CPI may drop from 2.1% to 1.0% annually. It could make the PBOC loosen its rules.

Stimulus packages might make people feel better about the future after China’s Covid19.

Conclusion

The sellers hit a significant support line in the short term, which kept the NZD/USD from moving.