- NZD/USD registers four-day losing streak.
- Global producers, central banks raised concerns over coronavirus’s economic impact.
- NZD’s proxy for China risk, coupled with upbeat US dollar performance, weighs on the pair.
- This week’s RBNZ will be the key, China data and coronavirus headlines could offer intermediate moves.
NZD/USD pulls back from the intra-day low of 0.6401 to 0.6406 by the press time of early Asian session on Monday. Even so, the pair nears the lowest since November 25, 2019. Not only the New Zealand dollar’s close economic ties with China but broadly strong US dollar also play its role to drag the Kiwi pair amid coronavirus fears.
Recently updated figures concerning China’s coronavirus show that the death toll has already crossed SARS while breaching 900 mark with the number of infected people inside the dragon nation rising beyond 37,000 by the end of February 09.
Noting this, analysts at the Australia and New Zealand Banking Group (ANZ) said, “disruption in the Chinese economy is already impacting our exports (tourism, education, meat and forestry, to name a few), and this will likely cause a sharp near-term dent to GDP growth.” As a result, the ANZ also downgraded its GDP forecast for the first half of 2020 to 0.8% from 1.3% predicted earlier.
On the contrary, the US fundamentals remain strong, as portrayed by the last week’s PMIs and employment data, whereas the greenback’s safe-haven allure also weigh on the pair.
While Wednesday’s monetary policy meeting of the RBNZ will be this week’s key event for the Kiwi traders, today’s China Consumer Price Index (CPI) and Producer Price Index (PPI) will also have its effects on the quote.
Even if the RBNZ isn’t expected to alter its monetary policy at this meeting, clues for coronavirus impact on the central bank’s future actions will be watched closely.
Regarding China data, January month numbers may be questioned based on the Lunar New Year holidays but still be watched for the partial impact of coronavirus. The headline CPI is expected to rise to 0.8% from 0.0% on MoM and 4.9% from 4.5% on YoY. The PPI may bounce back from -0.5% to +0.1% on YoY.
While 0.6450/55 can offer immediate upside barrier to the pair, the 200-day SMA level of 0.6500 will be the key resistance to watch if at all prices recovery. In the absence of any pullback, which is more likely, traders can take aim at November 2019 low near 0.6315.
Additional important levels
|Today last price||0.6406|
|Today Daily Change||5 pips|
|Today Daily Change %||0.08%|
|Today daily open||0.6401|
|Previous Daily High||0.6465|
|Previous Daily Low||0.6397|
|Previous Weekly High||0.6504|
|Previous Weekly Low||0.6397|
|Previous Monthly High||0.6741|
|Previous Monthly Low||0.6453|
|Daily Fibonacci 38.2%||0.6423|
|Daily Fibonacci 61.8%||0.6439|
|Daily Pivot Point S1||0.6377|
|Daily Pivot Point S2||0.6353|
|Daily Pivot Point S3||0.6309|
|Daily Pivot Point R1||0.6445|
|Daily Pivot Point R2||0.6489|
|Daily Pivot Point R3||0.6513|
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.