NZD/USD Price Analysis: Bounces off 0.6985 support confluence on upbeat China inflation

NZD/USD reverses early Asia losses, consolidates the heaviest daily losses in two weeks.
China inflation figures crossed forecasts for July even as CPI YoY eased below prior readings.
Convergence of 100-SMA, three-week-old support line back the corrective bounce.
Bulls need a clear break of immediate resistance line for conviction.

Anil Panchal FXStreet

NZD/USD picks up bids to 0.7013, up 0.06% intraday, during early Monday. In doing so, the kiwi pair reverses the initial losses, backed by China’s strong inflation figures.

China’s headline Consumer Price Index (CPI) MoM rose past +0.2% market consensus and -0.4% prior to +0.3% in July whereas the Producer Price Index (PPI) crossed 8.8% YoY forecast and prior level to 9.0%.

Read: China’s CPI beats estimates with 1.0% YoY in July, AUD/USD tests 0.7350

The strong inflation numbers from a key customer helped NZD/USD to bounce off a confluence of 100-SMA and a three-week-old support line. However, bearish MACD keeps the pair sellers hopeful.

Hence, the latest corrective pullback may aim for 0.7035 but a descending resistance line from Thursday, near 0.7055, could challenge the bulls.

Also acting as the upside hurdles are the last week’s top near 0.7090 and early July tops near 0.7105.

Meanwhile, a downside break of 0.6985 may take a break near 0.6920 before challenging the monthly low surrounding 0.6880.

Overall, NZD/USD remains in the bearish trajectory but intermediate bounces can’t be ruled out.

NZD/USD: Four-hour chart

Trend: Further recovery expected

Additional impotant levels

Overview
Today last price	0.7009
Today Daily Change	0.0000
Today Daily Change %	0.00
Today daily open	0.7009

Trends
Daily SMA20	0.6985
Daily SMA50	0.7044
Daily SMA100	0.7096
Daily SMA200	0.7103

Levels
Previous Daily High	0.7063
Previous Daily Low	0.7001
Previous Weekly High	0.7089
Previous Weekly Low	0.6952
Previous Monthly High	0.7106
Previous Monthly Low	0.6881
Daily Fibonacci 38.2%	0.7025
Daily Fibonacci 61.8%	0.7039
Daily Pivot Point S1	0.6986
Daily Pivot Point S2	0.6962
Daily Pivot Point S3	0.6924
Daily Pivot Point R1	0.7048
Daily Pivot Point R2	0.7086
Daily Pivot Point R3	0.711

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.

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