NZD/USD Trims China Data-Led Losses, 5-DMA Back on Sight?

NZD/USD Trims China Data-Led Losses, 5-DMA Back on Sight?

16 May 2016, 04:56
Roberto Jacobs
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NZD/USD Trims China Data-Led Losses, 5-DMA Back on Sight?

The Kiwi attempts a tepid-bounce from the Chinese data dump-induced weakness, and now looks to regain 5-DMA located at 0.6784 amid improved appetite for risk across the markets.

NZD/USD finds support just below 0.6750

Currently, the NZD/USD pair drops -0.35% to 0.6760, moving-off four-day low struck at 0.6746 in the last hour. The NZD/USD pair extends its bearish run into a second day this Monday, with the sentiment further worsened by poor string of data from China released over the weekend. Although a minor recovery attempt can be witnessed in the bird over the last hour, with the risk conditions slightly improving on the back of surging Japanese and Australian stocks.

The Kiwi was hammered earlier today as the Asian traders reacted negatively to the below estimates Chinese retail sales, industrial output and fixed asset investment data. The poor show of the Chinese economic indicators reinforced China slowdown fears and dented the sentiment around the NZD. China is New Zealand’s top trading partner.

Looking ahead, it’s an eventful week for the Kiwi, with a set of crucial macro data up on the cards, including the NZ PPI, GDT price index and inflation expectations, while the FOMC minutes will be also closely watched for fresh momentum.

NZD/USD Levels to consider

To the upside, the next resistance is located at 0.6784 (5-DMA), above which it could extend gains to 0.6800/27 (round number/ 1h 200-SMA). To the downside immediate support might be located at 0.67246 (100-DMA) and from there to 0.6700/0.6654 (round number/ 200-DMA).


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