NZD/USD remains below 21-day SMA ahead of China’s data dump
|- NZD/USD stays below the short-term key SMA for the seventh consecutive day.
- Trade optimism favored the quote earlier, upbeat US data helps played their role afterward.
- China’s Q4 GDP, December month Retail Sales, Industrial Production will offer immediate direction.
NZD/USD extends its recovery gains to 0.6635 at the start of Friday’s Asian session. The pair failed to keep the strength above 21-day SMA during the previous day after the US data propelled the US dollar (USD). Traders are looking towards China’s key statistics for fresh impulse.
Recently, New Zealand’s December month Business NZ PMI data suggested the contraction in business activity. The figures slipped below 50 mark, to 49.1, versus 50.6 forecasts and 51.4 prior.
The NZD/USD pair trimmed some of its early-day profits, earned through the phase-one deal optimism, after the US Retail Sales and Philadelphia Fed Manufacturing Index and Empire Manufacturing Index pleased the greenback buyers.
Even so, the latest release from Atlanta Fed shows that their GDPNow forecasts the fourth quarter (Q4) GDP at 1.8% from 2.3% anticipated earlier.
Also dimming the optimism are the comments from the Chief in Editor at the Global Times (GT), Hu Xijin who said, “US farmers must restrain the US President to ensure the China-US trade deal can be implemented consistently.”
It’s worth mentioning that the phase-one deal between the US and China doesn’t solve all the trade-related problems between the two great economies of the world and has a scope to renew the trade war that threatened global counterparts during the recent years.
Markets seem to take care of this and hence and risk-tone remains mildly positive with the US 10-year treasury yields gaining two basis points to 1.81%. However, Wall Street stays strong with the equity benchmarks rising to record highs.
Looking forward, China’s Q4 GDP, December month Retail Sales and Industrial Production will be the immediate catalysts to watch. While GDP is expected to remain unchanged at 6% and 1.5% respectively on YoY and QoQ basis, Industrial Production could soften to 5.9% from 6.2% YoY whereas Retail Sales could also weaken to .8% from 8.0%.
If Chinese fundamentals disappoint, the recent trade optimism may pressure the Reserve Bank of New Zealand (RBNZ) to change its bias and activate fresh New Zealand dollar (NZD) selling.
Technical Analysis
Repeated failures to cross 21-day SMA, at 0.6655 now, keep the sellers targeting sub-0.6600 area hopeful.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.