NZD/USD stabilizes around 0.6300 ahead of China inflation data

  • NZD/USD sellers catch a breath amid a lack of fresh clues, before key China data.
  • US-China trade optimism fades with the dragon nation’s need for more talks.
  • NZ Q3 CPI becomes the major driver of the week.

Despite no fresh clues that restore the confidence of the US-China trade watchers, NZD/USD retraces to 0.6300 amid very early Tuesday morning in Asia.

The Kiwi pair lost recovery strength on Monday as Chinese diplomats asked for more talks before signing a trade deal with the United States (US). Markets were earlier cheering the “Phase One” deal between the world’s two largest economies and hence got a reason to be careful. The same poured cold water on surprisingly upbeat statements by China’s Global Times’ Editor-In-Chief Hu Xijin.

While no clear scheduled is available for further talks between the US and China after both the global powers agreed for initial trade truce, investors will be keeping an eye over the headlines for fresh impulse.

For the immediate direction, China’s September month Consumer Price Index (CPI) and Producer Price Index (PPI) will be the key to watch. Forecasts suggest CPI remains static at 0.7% on MoM basis while rising to 2.9% from 2.8% on YoY format. Further, PPI might deteriorate further to -1.2% from -0.8% on a Year-on-Year basis.

It should be noted that New Zealand’s (NZ) third quarter (Q3) CPI data, up for release on Wednesday, becomes crucial for the Kiwi traders as it can help predict the Reserve Bank of New Zealand’s (RBNZ) next rate action. The headlines inflation gauge is expected to soften on YoY basis, to 1.4% from 1.7%, and can keep firming odds of another rate cut from the RBNZ.

Technical Analysis

While 0.6350/55 limits the pair’s immediate upside, 50-day Exponential Moving Average (EMA) level of 0.6371 holds the keys to the quote’s rise towards 0.6400 round-figure. Alternatively, 0.6276/70 support-zone including lows marked on September 03, October 10 and October-start highs can keep the pair’s short-term declines restricted before highlighting 0.6250 and 0.6200 rest-points.

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.

Feed news

Latest Forex News

Editors’ Picks

EUR/USD settles at 1.1050 on ECB, virus outbreak

The EUR/USD pair settled at its lowest for this 2020 after the European Central Bank announced a strategic review on inflation policy. Chinese coronavirus spreading abroad.


AUD/USD challenging weekly lows

The Aussie remains on the back-foot as the economy lost full-time jobs in December, while risk-aversion adds to the bearish case. Speculation mounts on an RBA rate cut next February.


Crypto Today: Bitcoin bears force critical

BTC/USD is currently trading at $8,400 (-3.40%) in the afternoon in U.S. hours, as markets bears break critical $8500 price mark, allowing for a wave of further downside pressure. 

Read more

XAU/USD bulls challenging 1573 resistance level

XAU/USD is trading in a bull trend above its main daily simple moving averages (SMAs). After rejecting the 1600 figure earlier in January, the metal has been consolidating near the $1560 per troy ounce.

Gold News

USD/JPY falls to fresh lows, correcting on WHO statement

USD/JPY has tumbled to print fresh lows since failing on the 110 handle, scoring 109.26 and meeting the 200-moving average on the four-hour chart.