NZD/USD looks for direction around 0.6650 ahead of China CPI

NZD/USD trades modestly unchanged near 0.6650 during early Asian morning on Thursday. The pair marked gains during the previous day as markets cheered the US President Donald Trump’s restraint from responding to the Iranian attack. Even so, the latest headlines concerning Iraq and from World Bank seem to weigh on the pair.

An early-Wednesday attack on the US military bases in Baghdad by Iran triggered a broad weakness of commodity-linked currencies, like the New Zealand dollar. However, US President Donald Trump’s speech and a no-damage report, coupled with Iran’s readiness to stop if the US doesn’t retaliation, helped trigger the pair’s recovery.

On the economic calendar, the US ADP Employment Change signaled an upbeat Nonfarm Payrolls (NFP), up for publishing on Friday, while rising beyond 160K to 202K. Elsewhere, New Zealand had nothing major to share and hence relied mostly on the market’s risk tone, which recovery during the later part.

The latest headlines from Iraq suggest fresh missile firings, with no damages, near the green zone. Also, the World Bank cut 2019 and 2020 global growth forecasts while citing a slower recovery in trade/investment.

Markets will now focus on the economic calendar that has December month ANZ Commodity Price Index, expected 3.0% versus 4.3% prior, from New Zealand. The same will be followed by Australia’s November month trade numbers with the headlines Trade Balance likely to improve from 4502M to 5915M. Though, major attention will be given to Chinese data, up for publishing on 01:30 GMT, wherein the Consumer Price Index (CPI) is expected to rise to 4.7% from 4.5% YoY.

Other than the data, traders will keep close eyes on the trade/political headlines as any negative surprise will be reacted sharply.

Technical Analysis

A bullish spinning top on D1 suggests the pair’s recovery to 0.6680 and 0.6700. Meanwhile, sellers can target 0.6600 and December 18 low 0.6554 during the downside.