NZD/USD Price Analysis: Finds support below 0.6100 on upbeat China data
- NZD/USD finds buying interest near 0.6080 as market sentiment slightly improves
- China’s upbeat Retail Sales data improve risk appetite of investors.
- The US Dollar falls slightly ahead of Fed policy decision.
The NZD/USD pair finds a temporary cushion near 0.6080 in Monday’s European session after a sharp sell-off in the last two trading sessions. The Kiwi asset rebounds to the round-level resistance of 0.6100 as market sentiment improves after China’s Industrial Production and Retail Sales data for February outperforms expectations.
China’s Retail Sales grew at a higher pace of 5.5% against expectations of 5.2% but were lower than the prior reading of 7.4%. The Industrial Production surprisingly rose to 7.0% against the consensus of 5.0% and the former reading of 6.8%. The New Zealand economy is one of the leading trading partners of China. Therefore, an improvement in China’s economic growth strengthens the appeal of the New Zealand Dollar.
Meanwhile, the market sentiment will play a key role this week as various central banks are lined up for interest rate decisions. The Federal Reserve (Fed) is scheduled to announce the policy decision on Wednesday alongwith the release of the dot plot and economic projections. The central bank is expected to keep interest rates unchanged in the range of 5.25%-5.50%.
The US Dollar faces slight pressure on cautiously optimistic market mood. The US Dollar Index (DXY) drops gradually to 103.40.
NZD/USD trades back and forth from a month, ranging between 0.6037-0.6218 on a daily timeframe. A prolonged consolidation indicates indecisiveness among market participants. The 20-period Exponential Moving Average (EMA) near 0.6131 broadly trades close to spot prices.
The 14-period Relative Strength Index (RSI) trades in a 40.00-60.00 range, which indicates a sharp volatility contraction.
Going forward, a downside move below February 13 low near 0.6050 would expose the asset to the psychological support of 0.6000, followed by November 9 high at 0.5956.
On the flip side, an upside move would emerge if the asset breaks above the round-level resistance of 0.6200. This would drive the asset towards a February 22 high at 0.6220, followed by a January 11 high at 0.6260.