NZD/USD clings to small recovery gains near mid-0.64s

• Surprise RBNZ rate cut weighs on NZD this week.
• RBNZ's Orr says they may need to lower interest rates further.
• Upbeat trade data from China helps Kiwi erase its losses.

The NZD/USD pair came under strong selling pressure following the Reserve Bank of New Zealand's (RBNZ) 50 basis points rate cut earlier this week and slumped to its lowest level since early 2016 at 0.6378. The escalating geopolitical tensions amid the US-China trade conflict put additional weight on antipodeans' shoulders and caused the bearish momentum to gather strength.

Dovish RBNZ outlook hurts Kiwi

During the early trading hours of the Asian session, RBNZ governor Orr said that they might have to lower the interest rate further if the consumers, businesses or government spending doesn't pick up as they expect. "The threat of the US-China trade issues has lingered too long, creating global economic uncertainty," Orr added.

Although these remarks didn't allow the pair to stage a recovery, upbeat trade data from China, which showed that the trade surplus in July came in at $45.06 billion to better analysts' estimate of $40 billion on the back of a 3.3% annual growth in exports, helped the Kiwi show some resilience.

Nevertheless, the RBNZ's dovish outlook and the lack of positive developments surrounding the US-China trade conflict is likely to keep sellers in control of the pair's action. 

Later in the day, weekly Initial Jobless Claims data from the US and Visitor Arrialvs data from New Zealand will be looked upon for fresh catalysts. 

Technical levels to watch for