NZD/USD pares early gains, trades below 0.6550

Upbeat inflation data from China helps antipodeans gain traction.
US Dollar Index edges lower toward 97.50 handle.
Coming up: NFIB Business Optimism Index and Unit Labor Cost data from US.

Eren Sengezer FXStreet

The NZD/USD pair closed the first day of the week with small losses and staged a recovery during the Asian trading hours. However, the pair seems to be gathering momentum in either direction ahead of this week's key events and was last seen trading at 0.6548, where it was virtually unchanged on a daily basis.

Earlier in the day, the data from China showed that inflation, as measured by the Consumer Price Index (CPI), rose to 4.5% on a yearly basis in November from 3.8% and beat the market expectation of 4.2% to help antipodeans find demand.

Markets stay calm ahead of FOMC

Nevertheless, the lack of fresh developments surrounding the US-China trade conflict forces investors to remain on the sidelines for the time being. Additionally, the Federal Open Market Committee's (FOMC) December meeting, which is likely to significantly impact the USD's market valuation, will kick off today and monetary policy decisions alongside the updated economic projections will be released on Wednesday.

Previewing this event, "we continue to see the risks skewed towards more rate cuts before an eventual hike. While Friday’s jobs numbers were fantastic other data suggest that the US economy is slowing," said ING analysts. "Capital expenditure has contracted in both 2Q and 3Q19 with the durable goods report hinting at a likely third consecutive fall in 4Q19.”

Later in the day, the NFIB Business Optimism Index, Nonfarm Productivity and Unit Labor Costs data from the US will be looked upon for short-term catalysts. Ahead of these data releases, the US Dollar Index is down 0.1% on the day at 97.55.

Technical levels to watch for

NZD/USD

Overview
Today last price	0.6546
Today Daily Change	-0.0007
Today Daily Change %	-0.11
Today daily open	0.6553

Trends
Daily SMA20	0.6444
Daily SMA50	0.6385
Daily SMA100	0.6404
Daily SMA200	0.654

Levels
Previous Daily High	0.6568
Previous Daily Low	0.6548
Previous Weekly High	0.6576
Previous Weekly Low	0.6424
Previous Monthly High	0.6466
Previous Monthly Low	0.6321
Daily Fibonacci 38.2%	0.6556
Daily Fibonacci 61.8%	0.656
Daily Pivot Point S1	0.6545
Daily Pivot Point S2	0.6536
Daily Pivot Point S3	0.6525
Daily Pivot Point R1	0.6565
Daily Pivot Point R2	0.6576
Daily Pivot Point R3	0.6585

Author

Eren Sengezer

FXStreet

As an economist at heart, Eren Sengezer specializes in the assessment of the short-term and long-term impacts of macroeconomic data, central bank policies and political developments on financial assets.

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