NZD/USD gains remain capped below 0.6600 on mixed China data

  • Bulls turn cautious amid a drop in Chinese investment growth.
  • But still underpinned by easing US-China trade woes and softer US CPI.

The NZD/USD pair is seen looking firmer so far this Friday, although the upside appears capped below the 0.66 handle following the release of mixed Chinese macro updates. 

NZD/USD: Focus shifts to NZ Q2 GDP

The NZD/USD pair extends the overnight recovery from a pullback to 0.6550 levels, but the bulls lack vigor, as a record low Chinese investment growth overshadowed upbeat China’s retail sales and industrial production data.

More so, downbeat tone seen around its OZ counterpart, the AUD, also collaborates to the stalled upside in the Kiwi. Although a better appetite towards risk assets on easing US-China trade tensions and higher oil prices continue to remain supportive of the higher-yielding NZD.

The spot rallied to fresh four-day tops at 0.6590 a day before after the US CPI figures arrived softer-than-expected and dragged the US dollar broadly lower. The US CPI rose 0.2 percent m/m in August, less than the 0.3 percent increase projected 

Attention now turns towards the US retail sales, industrial production and prelim UoM consumer sentiment data for fresh dollar trades, which will eventually impact the major. Meanwhile, all eyes also remain on the NZ Q2 GDP report slated for release next week.

NZD/USD Technical Levels

Resistances: 0.6600 (round figure), 0.6617 (Sept 6 high), 0.6673 (50-DMA).

Supports: 0.6558/54 (10 & 5-DMA), 0.6522 (daily S2/ Fib S3), 0.6502/1 (Sept 11 & 12 low).

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