NZD/USD Price analysis: Extends pullback from key resistance towards 0.6400 on softer China statistics
- NZD/USD takes offers to renew intraday low, snaps three-day downtrend while reversing from a two-month high.
- China’s growth of Retail Sales, Industrial Production eased in July.
- Previous resistance line from early July restricts immediate downside, 200-DMA appears a tough nut to crack for bulls.
- RSI hints at a pullback, MACD suggests limited downside room.
NZD/USD bulls retreat after China flashed downbeat statistics for July during Monday’s Asian session. That said, the Kiwi pair renews its intraday low near 0.6430 by the press time.
China’s Retail Sales eased to 2.7% YoY in July versus 5.0% expected and 3.1% prior whereas Industrial Production (IP) edged lower to 3.8% during the stated month, from 3.9% prior and 4.6% market forecasts.
With the downbeat data from the world’s biggest commodity user, NZD/USD portrayed the much-awaited pullback from the downward sloping resistance line from April 26, around 0.6465 at the latest. The Kiwi pair’s latest losses also justify the RSI retreat from the nearly overbought territory.
However, an upward sloping previous resistance line from July 08, close to 0.6420 by the press time, restricts the immediate downside of the NZD/USD pair.
In a case where the quote drops below 0.6420, the 0.6400 round figure and 100-DMA support near 0.6325 will gain the bear’s attention.
On the contrary, recovery moves need to cross the aforementioned resistance line near 0.6465 to recall the NZD/USD buyers.
Following that, 50% Fibonacci retracement of the April-July downside and the 200-DMA, respectively near 0.6530 and 0.6545, will be in focus.
NZD/USD: Daily chart
Trend: Limited 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.
