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  • NZD/USD trims the late Monday’s losses from 0.6719.
  • New Zealand’s (NZ) Q3 Westpac Consumer Survey eases from 102.40 to 95.1.
  • NZIER upgraded New Zealand GDP forecast, NZ PM Ardern keeps Auckland’s virus-led restrictions until September 21.
  • China’s August month Retail Sales, Industrial Production expected to print welcome figures.

NZD/USD struggles to extend recovery moves from 0.6696 beyond 0.6705 during the initial Asian session on Tuesday. While the market’s risk-on sentiment favors the pair traders to print a three-day winning streak, recently published consumer sentiment survey data from New Zealand precedes the market’s cautious mood ahead of the key Chinese statistics to probe the bulls.

Consumers stay cautious…

Although the NZ Institute of Economic Research (NZIER) revised up GDP forecasts for the year ending on March 2021, New Zealand Consumers aren’t optimistic as data for the third quarter (Q3) drops to 95.1 versus 102.4 forecasts and 97.2 prior. The reason could be traced from Prime Minister (PM) Jacinda Ardern’s decision to delay reviewing Auckland’s coronavirus (COVID-19)-led alert level to September 21.

Elsewhere, trading sentiment stays mildly positive as global markets put trust on the key central bankers up for conveying their monetary policy decisions this week, including the Fed, BOE and the BOJ. While none of them are expected to alter respective monetary policies, the readiness to take unconventional measures pushes the traders to stay at ease despite the pandemic.

Also favoring the risk-on mood could be news AstraZeneca restarted the vaccine trials and Pfizer is also promising the cure by the end of the year. It should, however, be noted that the US challenged the UK-based pharmacy company’s resumption of vaccine trials and dimmed the charm off-late. Even so, news that America eased travel warnings against China and Hong Kong favor the optimists.

Against this backdrop, S&P 500 Futures currently rise 0.23% after Wall Street benchmarks flashed over 1.5% gains each by the end of Monday’s trading.

Looking forward, China’s August month Retail Sales and Industrial Production, expected to recover from -1.1% and +4.8% to 0.0% and +5.1% respectively, become the key immediate catalyst to watch. Although the present market optimism and anticipated positive economics favor the kiwi bulls, fears of the no-deal Brexit and the Sino-American tussle on many issues keep the traders worried.

Technical analysis

While a clear break of the 10-day SMA, at 0.6692 now, enables the bulls to question the 0.6715/20 resistance zone, comprising July month’s high, the pair’s further upside will be questioned by the monthly top of 0.6790 and the 0.6800 threshold. On the contrary, the 21-day SMA level of 0.6653 restricts the pair’s short-term downside.