NZD/USD steadies near mid-0.64s as attention shifts to key Chinese data

China to release Industrial Production and Retails Sales data.
Hopes of progress in US-China trade talks help antipodeans find demand.
Broad USD strength limits pair's upside on Wednesday.

Eren Sengezer FXStreet

The NZD/USD pair fluctuated sharply in the early trading hours of the American session on surprise headlines surrounding the US-China trade dispute but steadied near the 0.6450 handle in the last hour and now remains on track to close the day flat ahead of critical macroeconomic data releases from China.

Following reports of a phone call between high level Chinese and American trade negotiators, the US Trade Representative's office on Tuesday announced that the Trump administration has agreed to delay additional 10% tariffs on some Chinese products including a wide range of consumer electronics and revived hopes of the trade war coming to an end.

NZD struggles to capitalize on trade optimism

With the initial market reaction, the trade-sensitive Kiwi gathered strength and lifted the pair to a daily high of 0.6470. However, this development was assessed as a factor that would allow the Federal Reserve to refrain from making a large rate cut in September and helped the Greenback outperform its rivals.

Moreover, the 10-year US Treasury bond yield gained traction on these headlines and rose more than 3% to support the dollar's recovery. The US Dollar Index was last up 0.4% on the day at 97.80.

In the early trading hours of the Asian session, Retail Sales and Industrial Production data from China will be looked upon for fresh impetus. Markets expect Retail Sales to increase by 8.6% on a yearly basis in July and a stronger-than-expected reading could cause the pair to rally in the first half of the day on Wednesday.

Technical levels to watch for

NZD/USD

Overview
Today last price	0.6451
Today Daily Change	0.0006
Today Daily Change %	0.09
Today daily open	0.6445

Trends
Daily SMA20	0.6612
Daily SMA50	0.662
Daily SMA100	0.6635
Daily SMA200	0.6722

Levels
Previous Daily High	0.6475
Previous Daily Low	0.6439
Previous Weekly High	0.659
Previous Weekly Low	0.6378
Previous Monthly High	0.6792
Previous Monthly Low	0.6543
Daily Fibonacci 38.2%	0.6453
Daily Fibonacci 61.8%	0.6461
Daily Pivot Point S1	0.6431
Daily Pivot Point S2	0.6417
Daily Pivot Point S3	0.6395
Daily Pivot Point R1	0.6467
Daily Pivot Point R2	0.6489
Daily Pivot Point R3	0.6503

Author

Eren Sengezer

FXStreet

As an economist at heart, Eren Sengezer specializes in the assessment of the short-term and long-term impacts of macroeconomic data, central bank policies and political developments on financial assets.

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