NZD/USD runs into 50-day MA hurdle ahead of China trade data
- NZD/USD is currently probing the 50-day moving average (MA) line, having failed to close above that average yesterday.
- Better-than-expected China exports and imports figure will likely boost risk sentiment, helping NZD revisit the highs above 0.6850 seen yesterday.
The NZD/USD pair is currently chipping away at the 50-day MA hurdle at 0.6809, having picked up a bid at 0.6793 earlier today.
The Kiwi jumped more than 100 pips in the Asian session yesterday and clocked a high of 0.6852 even though the Reserve Bank of New Zealand adopted a dovish stance on interest. The NZ-US yield differentials had declined sharply in the days leading up to the rate decision, meaning the dovish shift was priced in.
The Kiwi, therefore, witnessed a classic sell-the-rumor, but-the-fact trade post-RBNZ.
The American dollar, however, found takes in the American session after the upbeat US CPI report reduced dovish Fed policy bets. As a result, the NZD/USD pair trimmed gains and closed below the 50-day MA.
That average hurdle, however, could be convincingly scaled today if the China trade data, due in the next few hours, paints a positive picture of both the global and domestic economy.
China's imports in January are forecast to have declined 11 percent year-on-year in dollar terms, following a 7.6 percent contraction in the previous month. Meanwhile, exports are expected to have dropped 2.7 percent following a 4.7 percent fall in December.
A big beat on China's trade numbers could boost risk sentiment and put a strong bid under the NZD.
NZD/USD Technical Levels
Author
Omkar Godbole
FXStreet Contributor
Omkar Godbole, editor and analyst, joined FXStreet after four years as a research analyst at several Indian brokerage companies.
