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  • NZD/USD has met trendline resistance and corrects lower.
  • NZD/USD all eyes on cnetral bank governors speaking this week.  

We have Adrian Orr is speaking this week and there will be a glance at the New Zealand economy, where global manufacturing has been under pressure for a while which is weighing on the New Zealand economy due to  slowing global trade.  Indeed, last week’s Quarterly Survey of Business Opinion suggests slowing manufacturing activity. Analysts at ANZ Bank argue that  this has persisted  into Q2 and that this may now be leading to reduced headcount in the sector – “and hence a possible (but likely small, so far) spillover into household incomes. This week brings a scattering of monthly data releases, with a few partial Q2 CPI indicators (June food prices, rents, and our Monthly Inflation Gauge), our Truckometer, cards transactions (which isn’t very useful data), the June PMI and possibly REINZ housing market data.”

Meanwhile, what will draw more attention will be Fed Chair  Powell speaking who will use his two-day testimony before Congress to likely reiterate the view that the Fed stands ready to sustain the current economic expansion. “We expect the minutes to offer more clarity on what would lead the Fed to lend this support after the notable dovish shift at the May meeting. Global uncertainty and subdued inflation should remain key concerns for the Fed,” analysts at TD Securities said.  The analysts at also commented on this week’s key inflation data from the US, saying, “We look for headline CPI to slow a further two tenths to 1.6% y/y in June (flat m/m), on the back of a notable decline in energy prices. Core inflation should remain steady at 2.0% y/y, reflecting a firm 0.2% m/m advance. We pencil in a 0.2% m/m increase in core services and a flat reading in core goods, which should help buoy core CPI overall.”

NZD/USD  levels

NZD/USD has painted a bearish pin bar on the daily chart, capped through  the 200-day moving average following a triple bottom in May and June. The price is now below the 20 and 50-day moving averages. The price has also been pulling back from the downside resistance with 0.6602 recent spike-low  on the cards.  0.6657 ahead of recent double tops around  0.6730 come as upside objectives.