- NZD/USD bears take a breather ahead of data from the key customer.
- China’s official PMIs seem crucial to defend the early 2023 optimism.
- Mixed New Zealand trade numbers joined risk-off mood to welcome bears the previous day.
- Federal Reserve’s monetary policy meeting will be most important, NZ employment eyed as well.
NZD/USD holds its place on the bear’s radar, after confirming the seat on the previous day, as the Kiwi pair traders remain cautious ahead of the key data/events. That said, the quote seesaws near 0.6470 following the downbeat start to the crucial week comprising the US Federal Reserve’s (Fed) monetary policy meeting, as well as New Zealand’s (NZ) quarterly employment data. It should be noted that China’s officials NBS Manufacturing PMI and Non-Manufacturing PMI could offer immediate directions to the pair traders.
The major currency pair failed to cheer the return of Chinese traders after a one-week-long Lunar New Year (LNY) holiday as market sentiment worsened ahead of the top-tier data/events. Adding strength to the risk-off mood could be the cautious risk profile before the equity heavyweights like Amazon, Alphabet, Apple and Metal release their quarterly earnings. It should be noted that mixed NZ trade numbers also offered a reason for the Kiwi pair traders to probe the previous three-week uptrend.
On Monday, New Zealand’s headline Trade Balance improved to $-475M MoM for December versus $-2,108M prior while the yearly figure rose to $-14.46B compared to $-14.98B previous readings. Further details suggest that the Imports eased to $7.19B compared to $8.52B whereas the Exports increased to $6.72B for December compared to $6.34B prior.
That said, the US 10-year Treasury bond yields rose 2.4 basis points (bps) to 3.542% while Wall Street benchmarks closed in the red as market players rushed to risk safety ahead of the key front-line catalyst. Also challenging the sentiment could be the mixed headlines over China’s capacity to justify the latest optimism surrounding the world’s biggest commodity user even if it signals upbeat holiday spending and nearness to the current Covid wave.
Given the mixed mood and a light calendar at home, the NZD/USD price may remain depressed ahead of China’s NBS Manufacturing PMI and Non-Manufacturing PMIs for January. Forecasts suggest that the former is likely to remain below 50, close to 49.7, despite improving from 47.0 prior while the latter could regain above 50 level of 51.0 after slumping to 41.6 the previous month. It should be noted that the above 50 prints describe the activity increase while the below 50 numbers hint at a contraction in the activities. Other than the China PMI, Australia’s Retail Sales for December could also entertain NZD/USD traders ahead of the US Conference Board Consumer Confidence gauge for January. Also important will be the fourth quarter (Q4) Employment Cost Index (ECI).
Technical analysis
A sustained daily closing below the three-week-old support line, now resistance around 0.6520, directs NZD/USD price towards the 21-DMA level of 0.6405.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
USD/JPY flat-lines below 151.50 after soft Japanese CPI data
USD/JPY stays defensive below 151.50 after the release of a soft Japan's CPI report and mixed Industrial Production and Retail Sales data on Friday. Japanese verbal intervention also weighs on the pair amid the holiday-thinned conditions on Good Friday. US PCE inflation awaited.
AUD/USD buyers lack vigor above 0.6500 amid Good Friday trading lull
AUD/USD is trading listlessly above 0.6500 in the Asian session amid light trading on Good Friday. The Aussie pair shrugs off encouraging comments from China's FX regulator, as price action remains subdued ahead of the US PCE inflation data.
Gold flirts with record highs above $2,230, all eyes on US PCE data
Gold price flirts with record highs around $2,230 during the Asian session on Friday. The uptick of yellow metal is bolstered by the safe-haven flows amidst growing economic concerns and the prospect of interest rate cuts from the US Federal Reserve.
Ripple's move above this key level could trigger nearly 50% rally for XRP
Ripple price has overcome a critical resistance level and flipped into a support floor on the weekly time frame. This development happened while XRP tightly consolidated for roughly 250 days. As this coiling up comes undone, investors can expect XRP to kickstart a massive rally.
Will they won’t they cut rates is the question of Q2?
There has been some significant push back from Fed and Bank of England members around the timing of rate cuts, and the Bank of Japan still haven’t physically intervened in the FX market to stem yen weakness although they are threatening to do so.