NZD/USD fades a bounce to 0.7340, better China GDP ignored

Dhwani Mehta FXStreet

The NZD/USD pair paused its retreat from near multi-month tops of 0.7370 levels, following the release of stronger-than expected Chinese data dump.

NZD/USD: Will it sustain the bounce?

Having failed several attempts to take-out 0.7370 levels over the last week, the spot paused its 3-day winning streak and fell into the red zone on Monday. The retreat in the Kiwi can be largely attributed to a profit-taking slide, as investors resort to repositioning ahead of the key NZ CPI data due tomorrow.

The bulls, however, were offered temporary relief on upbeat Chinese macro news across all indicators, especially with a stronger-than expected Q2 GDP report. China is New Zealand’s biggest export destination.

Looking ahead, the recovery in the NZD/USD pair may not sustain amid broad based pick-up in buying interest seen in the US dollar, after Friday’s massive slump induced by downbeat US dataflow.

Also, RBNZ deputy governor Bascand’s comments continue to weigh on the pair, keeping any upside attempts short-lived.

NZD/USD Levels to consider

NZD/USD tests support near 0.7320, with a test of 0.7345 (Jul 3 high) still remains on the cards. Beyond which 0.7376 (Feb 7 high) will be on sight. To the downside lies 0.7209 (50-DMA) still guarding 0.7183 (Jun 15 low) and a break back below 0.7150 (psychological levels) are key near-term downside areas.

Author

Dhwani Mehta

FXStreet

Residing in Mumbai (India), Dhwani is a Senior Analyst and Manager of the Asian session at FXStreet. She has over 10 years of experience in analyzing and covering the global financial markets, with specialization in Forex and commodities markets.

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