NZD/USD registers three-day losing streak with eyes on Friday’s New Zealand CPI

• NZD/USD fails to recover amid a lack of fresh clues, broad US dollar strength.
• The US and China are likely taking a break from phase-two deal talks, markets respect the US-driven optimism.
• Downbeat Business NZ PSI added weakness to the kiwi pair.

NZD/USD remains on the back foot while taking rounds to 0.6605/10 during the initial Asian session on Tuesday. The pair recently weakened after New Zealand’s (NZ) Business NZ PSI for December slipped below 53.3 prior to 51.9. The quote has been under pressure since Thursday as traders cheer upbeat US data.

Despite the absence of the US traders on Monday, bulls keep the USD on their radar as the latest statistics from the world’s largest economy have been quite positive. It should also be noted that comparatively dovish outlook concerning the Reserve Bank of New Zealand (RBNZ) also weigh on the pair.

On the trade front, the US and China are likely to wait for the next round of talks despite the US side push for phase-two talks. The Global Times (GT) recently rolled out news suggesting that China needs time to impact of the trade deal.

Market’s risk-tone remains sluggish with the S&P 500 Futures being -0.03% to 3,324.

While the return of the US traders from the extended weekend and trade/political headlines could offer intermediate moves to the pair, Friday’s NZ CPI will be the key to watch. “We expect a 0.4% rise in consumer prices for the December quarter, largely due to travel-related prices over the holiday period. Annual inflation is expected to pick up to 1.8%, keeping it close to but just below the Reserve Bank's 2% target midpoint,” says Westpac.

It’s worth mentioning that Tuesday’s GDT Price Index, expected -0.30% versus +2.8%, can offer intermediate moves to the pair.

Technical Analysis

Unless providing a daily closing beyond a 21-day SMA level of 0.6655, prices are less likely to avoid visiting the monthly bottom near 0.6584.