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NZD/USD: Buyers and sellers jostle around 0.6720

  • In spite of recovery based on China data, sellers keep highlighting rate-cut fears due to CPI miss.
  • US data and trade-positive news reports will be awaited for fresh impulse.

NZD/USD trades little changed near 0.6720 at the start of Asian trading on Thursday. The Kiwi pair registered heavy losses yesterday despite rest of the commodity-linked currencies’ benefits due to China data. With fewer catalysts from New Zealand on hand, traders may concentrate more on headlines concerning the US-China trade deal and the US retail sales, Markit PMI in order to determine near-term moves.

Despite witnessing the upbeat response to China’s strong industrial production and GDP growth, not to forget better than projected retail sales, the New Zealand Dollar (NZD) remained on a back-foot on Wednesday as quarterly New Zealand CPI slipped beneath forecast and favored RBNZ’s rate-cut in May.

The New Zealand central bank turned bear in its March meeting and latest appearance of governor Adrian Orr also reiterated the bearish bias. Market players have been anticipated a quarter point rate-cut from the Kiwi central bank in May after it signaled appropriateness of the rate cut last month.

Moving on, developments surrounding the trade deal between the US and China will be closely observed as China is the world’s largest commodity user and a positive from it can help antipodeans as well. Comments from the US lawmakers, including President Donald Trump, have been positive for the trade deal and signal a result somewhere in the next two months.

At the economic front, March month retail sales, weekly initial jobless claims and April month Markit purchasing manager index (PMI) data from the US could gain market attention. The retail Sales control group may register +0.4% rise against -0.2% earlier contraction whereas weekly initial jobless for the period ended on April 12 might have increased to 205K from 196K.

The US Markit manufacturing PMI may increase to 52.8 from 52.4 but the services PMI could soften to 55.0 from 55.3.

NZD/USD Technical Analysis

Unless clearing 200-day simple moving average (SMA) level of 0.6730, NZD/USD can’t aim for 0.6780, needed to mention its capacity to conquer 50-day and 100-day SMA confluence near 0.6805-10.

On the downside, 0.6710, 0.6690 and 0.6650 are likely following numbers to watch during the pair’s additional south-run.

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