NZD/USD Price Analysis: Bears brace for monthly support below 0.6800 on mixed China data
- NZD/USD drops for the second consecutive day, depressed around intraday low.
- RSI retreat, failures to cross the key hurdles keep sellers hopeful.
- Monthly support line can test the bears targeting the 2021 low.
- 50-DMA, seven-week-old horizontal area restricts short-term advances.
NZD/USD holds onto the previous day’s weakness, down 0.26% around an intraday low of 0.6787 amid early Monday morning in Asia.
In doing so, the kiwi pair justifies the market’s risk-off mood and mixed data from China. The fourth-quarter (Q4) GDP rose past 0.2% prior and 1.1% forecasts to 1.6% QoQ while the YoY figures grew to 4.0% versus 3.6% expected and 4.9% previous readouts. Further, the Industrial Production (IP) for December rose above 3.6% market consensus and 3.8% prior to 4.3%. On the contrary, Retail Sales dropped below 3.7% market forecasts and 3.9% previous reading to 1.7% in December.
NZD/USD extends downside below 50-DMA after reversing from a seven-week-old horizontal hurdle surrounding 0.6890. The latest weakness takes clues from the RSI retreat but the bullish MACD signals keep the pair buyers hopeful until it drops below a monthly support line, around 0.6750 by the press time.
Should the quote decline below 0.6750, the year 2021 low near the 0.6700 threshold and the 61.8% Fibonacci Expansion (FE) of the pair’s moves between November 15 and December 24, around 0.6650, will be in focus.
Alternatively, the 50-DMA level of 0.6855 precedes a seven-week-old horizontal hurdle surrounding 0.6890 to limit short-term advances.
However, a clear upside break of 0.6890 should trigger a run-up targeting the mid-November lows near 0.6980.
NZD/USD: Daily chart
Trend: Further weakness expected
Author
Anil Panchal
FXStreet
Anil Panchal has nearly 15 years of experience in tracking financial markets. With a keen interest in macroeconomics, Anil aptly tracks global news/updates and stays well-informed about the global financial moves and their implications.
