- Revised down GDP forecasts from NZIER and soft Westpac consumer survey results challenge NZD/USD buyers.
- Weak data and expectations of dovish FOMC weigh on the USD.
- Trade negotiations between the US and China question the upside momentum.
NZD/USD trades near 0.6850 during the early Asian session on Tuesday. The quote gives up on a recent pullback after the quarterly result of Westpac consumer survey drew lower than the previous figure for the first quarter (Q1) of 2019. The NZD/USD pair turned weak during early Monday after NZIER lowered GDP forecasts and odds against the US-China trade deal rose. However, the greenback weakness and soft housing numbers from the US managed to confine the downside.
While Friday’s sluggish industrial production and NY empire state manufacturing from the US offered a good start of the week to the NZD/USD pair, sellers crept in after the New Zealand Institute of Economic Research (NZIER) lowered its gross domestic product (GDP) predictions. The report cut 2019 GDP forecast from 2.9% to 2.7%. Sellers also respected doubts over the US-China trade deal after the anticipated March meeting between the US President Donald Trump and his Chinese counterpart Xi Jinping is now less likely to be held before June.
The Kiwi recovered some of the initial losses after the US NAHB housing market index for March lagged behind 63 consensus by reprinting 62 number. Though, the pullback couldn’t last long as Q1 2019 Westpac consumer survey came in at 103.8 versus 109.10.
For the day, January month US factory orders and a fortnightly release of New Zealand’s GDT price index could offer immediate direction to the pair. The US factory order growth is likely to have grown to 0.3% from 0.1% whereas the GDT price index may disappoint Kiwi optimists with a 0.1% expansion over 3.3% earlier rise.
In addition to economic data, developments surrounding a trade deal between the US and China could also offer meaningful insight to the NZD/USD traders as China is the second largest consumer of New Zealand.
NZD/USD Technical Analysis
Inability to surpass six-week-old resistance-line, at 0.6880, highlights the 50-day simple moving average (SMA) level of 0.6815 as immediate important support ahead of drawing market attention toward 0.6790 comprising 100-day SMA.
Meanwhile, an upside clearance of 0.6880 enables the pair to aim for 0.6910 and 0.6940 numbers to the north.
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