NZD/USD Price Analysis: Drops towards 0.7000 on downbeat China data, Friday’s bearish Doji
- NZD/USD stays pressured around intraday low, fails to extend Friday’s recovery moves.
- China Retail Sales, Industrial Production dropped below market forecast and prior releases in July.
- Bearish candlestick formation joins recently sluggish RSI, Momentum to keep sellers hopeful.
- Bulls need to refresh monthly high for conviction.
NZD/USD remains depressed around 0.7035, down 0.09% on a day, after China released Industrial Production and Retail Sales data for July during early Monday.
China Retail Sales eased to 8.5% YoY versus 11.5% expected and 12.1% prior. Further, Industrial Production also weakened below 7.8% market consensus and 8.3% previous readouts to 6.4% yearly in July.
Read: Chinese Retail Sales +8.5% YoY vs 11.5% expected
Other than the downbeat figures from the key customer, bearish chart pattern and candlestick formation, coupled with the downward sloping RSI and Momentum line also NZD/USD sellers.
While the current weakness is ready to retest an ascending support line from July 28, around the 0.7000 threshold, any further downside will be challenged by the 200-SMA level of 0.6995.
In a case where NZD/USD Sellers keep reins past 0.6995, the monthly bottom surrounding 0.6950 should return to the charts.
Alternatively, a downward sloping resistance line from August 04, near 0.7050, restricts the quote’s immediate recovery moves ahead of the monthly peak of 0.7089.
Also acting as an upside filter is the 0.7100 round figure and May’s low around 0.7115.
NZD/USD: Four-hour 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.
