- Kiwi bulls cared less for mixed data at home amid growing speculations of the Fed rate cut.
- Trade tensions remain in place with no progress in the recent negotiations.
- China data dump will be closely watched for fresh impulse.
Having benefited from the US Dollar (USD) weakness during last week, the NZD/USD pair begins the current week on a positive note while taking the rounds to 0.6690 amid initial Asian session on Monday.
Even if the US inflation numbers didn’t dip further, the greenback failed to edge up as markets keep weighing on further rate cuts from the Federal Reserve. The reason being dovish signals by the key Fed policymakers, including the Chairman, coupled with the downbeat monetary policy meeting minutes.
The US-China trade stalemate keeps playing the background music investors gave little attention to. Neither side wants to give up on their previous view towards the other economy while media releases from both the economies kept spicing up the matter.
Improvement in New Zealand’s Business NZ Manufacturing Index and absence of disappointment from China’s inflation data could be considered as additional catalysts supporting the Kiwi’s upside.
Looking forward, China’s data dump including top-tier statistics like Retail Sales, Industrial Production and Gross Domestic Product (GDP) will be the key to watch for Antipodeans. Not only June month Retail Sales and Industrial Production but second quarter (Q2) 2019 GDP data also bears consensus of the mixed outcome.
Retail Sales (YoY) is expected to print 8.3% versus 8.6% prior whereas Industrial Production may clock 5.2% growth against 5.0% earlier rise. Further, GDP could increase to 1.5% from 1.4% (QoQ) registered in the previous quarter while yearly forecasts suggest a softer growth of 6.2% compared to 6.4% noted during the last readouts.
At the US, the New York Empire State Manufacturing Index for July could also entertain traders. The manufacturing gauge is expected to rise to 0.5 from -8.6 prior.
Technical Analysis
Having successfully crossed 100-day exponential moving average (EMA), the Kiwi pair is again on the run-up to cross 200-day EMA, at 0.6714 now, a break of which can accelerate the quote’s rise towards month’s high around 0.6730. In a case, prices fail to hold the latest strength and slip beneath 100-day EMA level of 0.6662, July 09 high around 0.6632 and last-week bottom surrounding 0.6567 could be of importance to the sellers.
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