NZD/USD sub-0.74 ahead of Chinese data and Fed’s Bostic speech

The NZD/USD is trading at 0.7365 inside Friday’s range and slightly up on Monday (+0.15%) as the greenback is trading lower and re-visiting 89.50 on the US Dollar Index (DXY). 

The US dollar is on the backfoot trading from 89.84 in Asia to sub-89.50 in the US session. The US-led airstrike on Syria didn’t lead to a US stock sell-off as it was seen as a one-time event by financial markets. However, investors are still evaluating the possible diplomatic consequences with Russia which backs the Syrian regime. 

Coming up next on Monday is the speech from the Atlanta Fed President R.Bostic who is a FOMC voting member and a centrist.The speech is slated at 17:15 GMT.

On Tuesday, investors will closely watch the Chinese Gross Domestic Product (GDP), Retail Sales and Industrial Production figures, which are scheduled at 2:00 GMT. Since China is a top New-Zealand’s trading partner, positive signs in the Chineses economy usually strengthened the NZD. Also on the traders’ radar on Tuesday will be the weekly Global Dairy Trade (GDT) index data. 

Earlier in the day, the month-on-month readings (March) for the US Retail Sales came in better-than-expected while the Empire State Manufacturing Survey conducted by the Federal Reserve Bank of New York disappointed the market. The somewhat positive news with the Retail Sales did nothing to help the negative sentiment on the buck as the market kept selling US dollars after the news release. 

Looking back, last week the NZD got a boost on the back of the Chinese President, Xi Jinping’s speeches at the Boao forum in China where he mainly pushed for free trade.

“This year we will significantly lower import tariffs on motor vehicles and reduce import tariffs on some other products. We will import more products that are competitive and needed by our people,” said Xi Jinping. “China’s reform and opening-up meet its people’s aspirations for development, innovation and a better life. It also meets the global trend towards development, co-operation, and peace,” he added. 

NZD/USD technical outlook: 

“The pair looks to build on its Friday correction in the new week as it saw price weakness during early Monday trading session.  Support lies at the 0.7300 level. Further down, the 0.7250 level comes in as the next downside target. Conversely, resistance resides at the 0.7400 level where a break will aim at the 0.7450 level. A break of here will have to occur to create scope for a run to the 0.7500 level. Further out, resistance stands at the 0.7550 level. All in all, NZD/USD faces further downside pressure” points out Mohammed Isah from FXTechstrategy.