NZD/USD hits one-month highs, eyes China data

NZD/USD has hit a one-month high and may extend gains if China's gross domestic product (GDP) for the third quarter, scheduled at 02:00 GMT, betters estimates.

At press time, the currency pair is trading at 0.6369, the highest level since Sept. 16,  having picked up a bid at 0.6343 in the early Asian trading hours. Also, the spot is trading above the 200-day moving average for the first time since July 30.

Bullish reversal

The pair rallied by 0.88% on Thursday - the biggest single-day gain since June 3 – validating the seller exhaustion signaled by consecutive Doji candles created on Tuesday and Wednesday. Put simply, Thursday's rise confirmed a bullish Doji reversal and opened the doors for a convincing break above 0.64.

Therefore, the rise to one-month highs seen at press time is not surprising and further upside could be seen if China's data assuage fears of a deeper slowdown in the world's second-largest economy.

Focus on China data

The data due at 02:00 GMT is expected to show the gross domestic product (GDP) grew by 6.1% in the July-September quarter from a year earlier, the slowest pace since the first quarter of 1992, the earliest quarterly data on record. The economy had grown by 6.2% in the second quarter.

Meanwhile, the Industrial Production is forecasted to rise 5% year-on-year in September, having risen by 4.4% in the preceding month. September Retail Sales growth is expected to print at 7.8% year-on-year, following a 7.5% reading in August. 

An above-forecast data will likely bolster the bullish setup in the NZD/USD pair. A weak data could yield a pullback in NZD/USD, although the bullish Doji reversal will remain valid as long as the pair is holding above Wednesday's low of 0.6241.

Technical levels