Directionless Kiwi sees little action after China data release
The NZD/USD has been trading the narrow range of 0.7060-0.70 for more than a week now, occasionally dipping below 0.70, but struggling to clear 0.7059 (38.2 percent Fibonacci retracement of Apr high-May low).
The story remains the same today as the pair is reporting marginal losses at 0.7018, but could feel the gravitational pull, courtesy of weak China data.
The industrial production in the world's second-largest economy rose 6.8 percent year-on-year in May, missing the estimate of a 7 percent rise. Further, consumption, as represented by retail sales, printed t 8.5 percent year-on-year - well below the estimated figure of 9.6 percent. Also, fixed asset investment came in at 6.1 percent, missing the expected growth of 7 percent.
Clearly, the data are negative for NZD and other commodity dollars, and may also hurt the broader market sentiment.
So, the probability of NZD/USD moving above 0.7059 (38.2 percent Fibonacci retracement) is quite low.
NZD/USD Technical Levels
Support: 0.70 (psychological level), 0.6947 (previous day's low), 0.6903 (May 10 low).
Resistance: 0.7062 (50-day moving average), 0.7119 (200-day moving average), 0.7123 (50 percent Fibonacci retracement of Apr-May sell-off)