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FxWirePro: NZD/USD holds cloud support, fades poor China data led weakness

NZD/USD chart – Trading View 

Spot Analysis:

NZD/USD was trading 0.12% higher on the day at 0.7102 at around 09:15 GMT

Previous Week’s High/ Low: 0.7158/ 0.7075

Previous Session’s High/ Low: 0.7150/ 0.7082

Fundamental Overview:

Downbeat China economic data released earlier today weighed on the antipodeans, dragging the pair lower. 

China’s industrial production grew a lower-than-expected 5.3% year-on-year, while fixed-asset investment grew 8.9% year-on-year, in August. Retail sales grew 2.5% year on year.

Broad-based US dollar weakness helped limit losses in the pair. NZD/USD reversed from session lows at 0.7073 and was trading above 0.71 handle.

Less-than-expected rise in US inflation last month created uncertainty about the timing of the Federal Reserve’s tapering of asset purchases.

Investors now look to the Fed’s latest policy decision, due to be handed down next week, for further timeline clues.

Technical Analysis:

– Price action was rejected at channel top and has slipped below 200-DMA

– Downside has held support at daily cloud, breach below will drag the pair lower

– Momentum is bullish, Stochs and RSI are biased higher

– GMMA shows minor trend is bullish, while major trend is turning bullish

Major Support and Resistance Levels:

Support – 0.7058 (21-EMA), Resistance – 0.7115 (200-DMA)

Summary: NZD/USD is trading with a bullish bias, but is struggling at some stiff resistance at 200-DMA and channel top. Decisive break above will fuel further gains. Focus on New Zealand GDP data and FOMC meet for impetus. 

Read More: FxWirePro: NZD/USD holds cloud support, fades poor China data led weakness

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