AUD/NZD remains indecisive above 1.0400, China trade data, RBA eyed

• AUD/NZD remains lackluster below the key technical hurdles, struggles to extend corrective pullback of late.
• Mixed concerns over virus, cautious optimism for central bank actions restrict the pair’s moves.
• RBNZ’s Orr cites virus concerns, signaling challenges to the rate hike.
• China trade data for August may add to the uncertainty but the RBA’s likely delay in taper could favor the bears.

AUD/NZD seesaws around 1.0425 during a sluggish Asian session on Tuesday. The cross-currency pair refreshed yearly low the previous week and has been struggling for a clear direction, consolidating losses at a slower pace, afterward.

The pair’s latest moves could be linked to the cautious sentiment ahead of the key China trade numbers for August and the monetary policy meeting of the Reserve Bank of Australia (RBA). Also contributing to the inactivity could be mixed concerns over the coronavirus conditions in Australia and New Zealand.

Although New Zealand easing virus-led alert levels from 3 to 2 ex-Auckland the previous day, fears of a spike in Aussie hospitalizations the next week and virus resistance to the vaccine weigh on the mood. Even so, recently easing chatters over the monetary policy tightening, be it at the Fed, RBA or the Reserve Bank of New Zealand (RBNZ) portray cautious optimism for the markets.

That said, RBNZ Governor Adrian Orr recently cited the virus-led lockdowns as disruptive. The New Zealand central bank surprised markets by not announcing the rate hike in August as the covid conditions worsened in the Pacific nation.

On the other hand, the RBA is up for pushing back the earlier plan of reducing the weekly bond purchases as the COVID-19 numbers tease record tops and fears are high in the Oz nation.

Amid these plays, S&P 500 Futures print mild gains with eyes on the return of the US and Canadian traders from the extended weekend.

Also important will be China trade data for August and the RBA. While the RBA is likely to underpin the Aussie dollar (AUD) weakness, by delaying the taper, China data may come out as mixed and confuse AUD/NZD traders going forward.

Read: Reserve Bank of Australia Preview: Focus on tapering and growth

Technical analysis

In addition to the 20-DMA near 1.0440, multiple descending trend line from July around 1.0450 adds to the immediate upside filters, suggesting brighter chances for the pair’s south-run to refresh yearly low of 1.0337.