NZD/USD reverts to test 3-week lows near 0.7350 on poor China trade

Dhwani Mehta FXStreet

The NZD/USD pair is back on the offers and look to test key support located near 0.7350 levels, after having faced rejection once again at higher levels on the release of worse-than expected Chinese imports and exports figures.

NZD/USD consolidates the downside ahead of RBNZ

The Kiwi stalled its ongoing recovery mode from three-week lows and now remains vulnerable towards 0.7250 levels, with the downside risks opening up on the back of downbeat Chinese trade data, with a big miss on imports weighing down on NZD. New Zealand is highly dependent on China for its exports revenues.

China’s July trade data (Yuan terms): Exports & imports miss expectations

The recent slew of downbeat Chinese data, including the services PMI report, continue to dampen the sentiment around the major.

China’s Caixin Services PMI eases in July, misses expectations

Additionally, overnight oil-price weakness combined with moderate risk-aversion prevalent in Asia, also collaborates to the downbeat tone seen around the NZD/USD pair. Meanwhile, the spot ignores renewed broad based US dollar selling amid subdued Treasury yields.

The pair will get influenced by the broader market sentiment ahead of the US datasets due later in the day ahead, as markets digest the Chinese trade data and gear up for China’s inflation data due tomorrow.

NZD/USD Levels to consider

NZD/USD failed near 0.7370 levels, with 0.7348 (3-week lows) still guarding 0.7330 (classic S1/ Fib S2) and a break back below 0.7300 (round figure) are key near-term downside areas. To the topside, a test of 0.7374 (daily pivot) due on the cards, which could open doors towards 0.7393 (5-DMA).

Author

Dhwani Mehta

FXStreet

Residing in Mumbai (India), Dhwani is a Senior Analyst and Manager of the Asian session at FXStreet. She has over 10 years of experience in analyzing and covering the global financial markets, with specialization in Forex and commodities markets.

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