GBP/JPY testing offers once again near 141.80 amid risk-off
NZD/USD was robust overnight, despite the risk-off theme surrounding the deteriorating global growth picture which sent markets into risk-off mode.
The bird was climbing in European trade from a low of 0.6706 to a North American high of 0.6725. The pair then drifted back as the dollar picked up a bid from the session lows, (DXY traded at 96.22 and then rallied to 96.37). Kiwi traded as low as 0.6718 ahead of the CPI data. On the data the pair shot up to a high of 0.6749 before easing back a touch.
The data surprised to the upside, where markets were getting positioned for a flat and inline or worst than expected reading. However, the beat was marginal at best and it is unlikely to shift the status quo at the RBNZ that is more forward-looking than dwelling on past performance.
"The medium-term outlook for domestic inflation is more troubling. The RBNZ needs to see accelerating GDP growth to achieve a sustained lift in inflation, and the prospect of that is slipping away," analysts at ANZ bank argued.
Global growth outlook to clip bird's wings
The dominating theme in markets stays with a deteriorating global growth picture and recent IMF warnings/ downgrades. IMF Chair Christine Lagarde cut global growth forecast for 2019 to 3.5 percent from 3.7 percent. Speaking at the World Economic Forum in Davos, Switzerland, she said that high level of economic risks are accelerating around the globe and cited the U.S.-China trade war, Brexit and China's slowing economy as the main culprits.
The price is now testing through the 21-D SMA located at 0.6741 with a confluence of the 25th Nov pivotal low and a break below there will open up 0.6705. A break of the 100-D SMA at 0.6688 with daily closes will sure up the negative bias again, especially on a break back below the 23.6% Fibo. However, on the upside, 0.6780 guards a run to 0.6800/60 territory.