NZD/USD remains on the road to recovery ahead of China data

NZD/USD recently benefited from trade-positive news.
The tension surrounding Hong Kong and ahead of China’s key statistics cap the Kiwi’s upside.

Anil Panchal FXStreet

With the US President Donald Trump breaking positive trade news for China, NZD/USD followed other Antipodeans and recovered from the latest lows. The Kiwi pair carries the gains forward while trading near 0.6455 at the start of Wednesday’s Asian session.

The US finally shifted tariffs on some of the Chinese goods from September 01 to December 15 and triggered market risk-on during the previous day. Commodity-linked currencies reacted positively the news while the Kiwi recovered some of the earlier losses, mainly due to upbeat inflation numbers from the US.

Not only the tariffs but reports that the US and Chinese diplomats are again talking trade also pleased traders on Tuesday.

However, geopolitical tension surrounding Hong Kong remains in the limelight and keeps the prices in check. With this, the Kiwi pair closed without major change from the opening price on Tuesday.

During the early day, markets kept extending their support to the quote ahead of China’s July month Retail Sales and Industrial Production data. Forecasts suggest Retail Sales (YoY) to soften to 8.6% from 9.8% prior while Industrial Production could also take a hit to 5.8% from 6.3% while looking at the yearly figures.

Technical Analysis

A Doji candle on the Daily chart supports price recovery to 21-day exponential moving average (EMA) level of 0.6550. However, a sustained break beyond June month low of 0.6487 becomes necessary for the same. In the absence of which, prices may revisit 0.6400 and latest low surrounding 0.6378.

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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