- The Kiwi traders recover some of the post-CPI losses ahead of China data-dump.
- 200-day SMA acts as immediate resistance for the pair to clear.
NZD/USD trades near 0.6710 as it recovers nearly 30 pips from its post-New Zealand CPI slump during early Wednesday. While softer than expected inflation figures strengthen market consensus for RBNZ’s rate-cut, likely positive data from China seems currently helping the pair.
Headline consumer price index (CPI) for the first quarter (Q1) of 2019 lagged behind 0.3% and 1.7% forecasts as they came in at 0.1% and 1.5% QoQ and YoY respectively.
With the inflation data missing the marks, chances of the Reserve Bank of New Zealand (RBNZ) announcing a rate-cut in May seem brighter. Underlying reasons could be the central bank’s dovish turn in March and Governor Adrian Orr’s recent comments that the RBNZ holds its bearish bias.
China’s data-dump including industrial production, gross domestic product (GDP) and retail sales are in the market’s spotlight for now as the dragon nation is the world’s largest commodity user.
First quarter (Q1) GDP figure for the year 2019 could soften to 6.3% from 6.4% on a yearly format and to 1.4% from 1.5% on QoQ basis whereas March month industrial production may recover to 5.9% from 5.3%. Further, the retail sales (YoY) might please buyers with an increase to 8.4% from 8.2%.
The quote needs to regain its stand beyond 200-day simple moving average (SMA) figure of 0.6730 in order to aim for 0.6805-10 resistance-confluence comprising 50-day and 100-day simple moving average (SMA).
Should prices fail to hold recent recovery and again slip beneath 0.6700 round-figure, 0.6650 is likely important support to watch as a break of which could drag prices to 0.6585.
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