AUD/NZD: 30 pips down recent high as traders await China data-dump
- New Zealand CPI triggered the pair’s rally but buyers are still cautious ahead of China data.
- A successful break of 200-day SMA can challenge 1.0755/65 area including late-2018 highs.
AUD/NZD trades near 1.0680 during initial Asian sessions on Wednesday. The quote previously surged to the highest since November 2018 after New Zealand CPI disappointed Kiwi buyers. However, buyers booked some of the profits ahead of the key China data-dump.
New Zealand Dollar (NZD) dropped across the board after quarterly consumer price index (CPI) data strengthened expectations of May month rate-cut from the Reserve Bank of New Zealand (RBNZ). The Q1 2019 CPI grew 0.1% versus 0.3% on a quarterly basis while registering a 1.5% increase compared to the 1.7% market consensus on YoY format.
Even if China data is important for antipodeans as a whole, the Australian Dollar (AUD) is likely to benefit more as the dragon nation is Australia’s largest customer.
The data-dump includes first quarter (Q1) 2019 gross domestic product (GDP) and March month annualized figures of retail sales and industrial production releases from the world’s largest industrial player and the biggest commodity user.
Forecasts suggest welcome prints from retail sales and industrial production to confront soft GDP outcome. Retail sales growth could increase to 8.4% from 8.2% while industrial production may also register expansion by 5.9% versus 5.3% prior. Additionally, GDP YoY may soften to 6.3% from 6.4% whereas quarterly growth figures may decline to 1.4% from 1.5% earlier.
In addition to China data, developments surrounding the on-going trade talks between the US and China could also direct near-term moves of the pair.
AUD/NZD Technical Analysis
AUD/NZD needs to hold its break beyond 200-day simple moving average (SMA) level of 1.0685 in order to aim for 1.0755/65 area including late-2018 highs whereas 1.0800 and 1.0840 can entertain buyers then after.
Meanwhile, quote’s dip beneath, 1.0670, including January high, can recall 61.8% Fibonacci retracement of August 2018 to January 2019 downpour, at 1.0600, on the chart.