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NZD/USD finds support circa 0.7850, China-inspired spike erased

FXStreet (Bali) - NZD/USD was unable to sustain last Friday's Chinese rate cut-induced gains, with the rate returning back towards 0.7840/50 support, last paid at 0.7863.

Sentiment-wise, the NZD remains fairly neutral ahead of today's NZ inflation expectations QoQ, not usually a mover for the currency, but since low inflation has become a worrying global theme, it would be worth keeping an eye on the data and its possible consequences from a monetary policy standpoint. A low read should make it less troublesome for the NZ Central Bank to remain neutral for longer, whereas a higher-than-expected print would raise questions on how long the RBNZ can hold its tightening bias in stand-by.

Technically, Jim Langlands, Founder at FXCharts, notes: "Not too much change is seen from a technical perspective although the Kiwi is sitting just above minor rising trend support, a break of which could trigger an acceleration lower. If so, we now have a minor double bottom at around 0.7845 (Friday’s low), a break of which would head to Thursday’s base at 0.7806. On the topside, 0.7870 (100 HMA) becomes the first hurdle, ahead of 0.7890 (200 HMA). Above there would see sellers at 0.7900/10, a break of which would head towards Friday’s China rat-cut inspired spike up to 0.7945."

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