NZD/USD technical analysis: Recovery continues after RBNZ Gov Orr's comments and China data

The NZD continues to recover lost ground after RBNZ Governor Orr's comments.
The surge in China's April imports may help Kiwi erase post-RBNZ drop.

Omkar Godbole FXStreet Contributor

NZD/USD's recovery from the session low of 0.6525 printed immediately after the RBNZ rate cut announcement earlier today continues with the spot currently trading at 0.6585.

RBNZ's Governor Adrian Orr was out on the wires soon before press time stating that there are significant uncertainties around the rate track in New Zealand and the US-China trade war is one of the major concerns of the central bank. Orr added further that he is surprised by the downturn in business sentiment and consumer spending.

Orr's comments may bolster expectations of another rate cut in August, complicating Kiwi's recovery.

However, China April trade data released a few minutes ago offered good news in the form of a 10% year-on-year spike in imports in CNY terms, a sign of an uptick in domestic demand. As a result, Kiwi may rise back to the pre-RBNZ level of 0.66.

That said, the outlook would remain bearish as long as the descending trendline connecting March 26 and April 17 highs is intact.

Daily chart

Trend: Bullish above trendline resistance

Pivot points

1. R3 0.667
2. R2 0.6651
3. R1 0.6625
PP 0.6606
1. S1 0.658
2. S2 0.6561
3. S3 0.6535

Author

Omkar Godbole

FXStreet Contributor

Omkar Godbole, editor and analyst, joined FXStreet after four years as a research analyst at several Indian brokerage companies.

AUD/USD hangs close to monthly lows, still defends 0.7100 ahead of Fed decision

AUD/USD retains its negative bias for the third straight day, defending 0.7100 while trading close to a monthly low in Wednesday's Asian session on Wednesday. The US Dollar stands firm near a two-week high as the anticipated Fed rate hike and oil-driven inflation fears continue to push US bond yields to a multi-year high. Furthermore, escalating Middle East tensions benefit the safe-haven buck and weigh on the risk-sensitive Aussie.

USD/JPY holds firm above 155.00, awaits Fed policy announcements

USD/JPY climbs to a fresh one-week high above 155.00 in the Asian session on Wednesday amid a bullish US Dollar. Oil-driven inflation fears, along with the anticipated Fed rate hike, continue to support surging US bond yields. Moreover, rising US-Iran tensions underpin the USD's reserve currency status. The pair, however, remains below the mid-155.00s as bulls seem hesitant ahead of the Fed decision later today and the BoJ meeting, starting on Thursday.

Gold traders seem noncommittal below $4,350; eyes Fed rate decision

Gold clings to modest intraday gains through the first half of the European session, albeit it lacks follow-through buying and remains below $4,350. The US Dollar eases from a two-week high amid some profit-taking, offering support to the commodity. Traders, however, seem hesitant to place aggressive directional bets and opt to wait on the sidelines heading into the key central bank event risk.

Cardano's bearish breakout warns of a 15% downside risk

Cardano (ADA) hovers around $0.1900 at press time on Wednesday after a 6% decline the previous day, breaking below a crucial support level. Declining on-chain activity across the Cardano ecosystem, with reduced transaction count and Real Economic Value (REV), suggests waning user demand.

Fed decision in focus

Starting with the most important, the Fed decision. Heading into the event, data showed a rather punchy US August jobs report, which, you will likely recall, triggered a hawkish Fed rate repricing in rates markets. However, the recent US August CPI print mattered more.

How Japan became the World's Banker and why that era may be ending

Japan's ultra-low interest rates helped finance trillions of dollars in global investments for more than a decade, making the Japanese Yen one of the world’s cheapest sources of funding. With the Bank of Japan expected to tighten policy again this week, that advantage may be entering a new phase. While most major economies raised interest rates, Japan remained the world's outlier.