NZD/USD remains on a back foot around 0.6580 ahead of data-flow
|- Doubts over US-China trade deal, sluggish data, and greenback strength weigh on Kiwi.
- Domestic retail sales and China inflation data in the spotlight for now.
Following another day ruled by bears, the NZD/USD pair continues to be on a back foot near 0.6580 ahead of a slew of domestic and China data at the start of Wednesday’s Asian session.
The kiwi became the worst G10 performer on Tuesday, extending its Monday losses, as overall US Dollar strength (USD) and New Zealand Government’s plan to cut live animal exports dragged the commodity-linked currency down.
Also weighing the sentiment could be the US President Donald Trump’s latest threats to levy fresh tariffs on China if either there is no meeting at G20 or the deal isn’t good to be accepted.
Investors may now focus on today’s data flow comprising May month data for New Zealand credit card retail sales and China’s inflation numbers.
The domestic figure might flash mixed results as the consensus shows a +0.7% growth versus +0.6% previous expansion on MoM and a soft increase of 1.6% from 4.5% prior on a yearly format.
China’s consumer prices index (CPI) could rise to 2.7% from 2.5% (YoY) whereas producer price index (PPI) might decline to 0.6% from 0.9% earlier on a yearly basis.
On the other hand, the US CPI might soften to 1.9% from 2.0% on a yearly format whereas CPI ex-food and energy might increase to 0.2% from 0.1% on a monthly basis.
Other than data, news relating to the US-China trade stalemate should also be given equal importance in order to better predict near term price momentum.
Technical Analysis
The Kiwi pair is yet to slip beneath 0.6560 that holds the gate for the pair’s further declines to 0.6500 and 0.6480. As a result, chances of the quote’s U-turn to 50-day simple moving average (SMA) level around 0.6625 and then an increase to latest high near 0.6680 can’t be ruled out.
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