NZD/USD under pressure below 0.6940 ahead of Chinese data

The Chinese Retail Sales and Industrial Production data are scheduled on Tuesday at 2:00 GMT and can affect the NZD.
The US Retail Sales data on Tuesday can add further pressure to the kiwi if it comes better-than-anticipated.

Flavio Tosti Independent Analyst

The NZD/USD is trading at around 0.6930 down 0.52% on Monday.

After reaching a high at 0.6974 in Asia, the NZD/USD pair was mainly offered throughout the European session. At the time of writing the currency pair found an intraday low at 0.6926.

Despite some broad-based USD profit-taking on EUR and GBP, the greenback is stronger versus its NZD competitor. The currency pair already proved to be extremely soft in recent weeks on the back of rate hike expectations. However, adding more fuel to the fire of late for the NZD/USD bear case was the surprisingly dovish stance of the Reserve Bank of New-Zealand stating that “the official interest rate is expected to remain at 1.75% for a considerable period” and that “low-interest rates will help support employment and raise inflation.”

Coming up next on the macroeconomic calendar is the Chinese Retail Sales and Industrial Production for March. The Asian superpower is a top trading partner with New-Zealand and therefore the data generally affect the NZD as well. The news is scheduled for Tuesday at 2:00 GMT.

Looking further the next market moving event is likely going to be the US Retail Sales data for April. A strong deviation to the upside would reinforce the idea of the inflation being on track in the US and push the kiwi lower.

The NZD/USD 4-hour chart

The trend is bearish and immediate support is seen at 6926 low of the day, followed by 6902 low of the year and the 0.6850 figure. To the upside, resistances are seen at 0.6950 supply level and at the 0.7000 handle. The kiwi is trading below its 50, 100 and 200-period simple moving averages on the 4-hour chart suggesting a strong downward momentum.

Author

Flavio Tosti

Independent Analyst

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