The NZDUSD currency pair has dropped below the 0.6100 level due to China’s slowing economy.

…
This is a premium post.
[s2If !current_user_can(access_s2member_level4)]Please register for FREE REGISTER to read full post below containing analysis. In case of any error or you think you are not able to read the full post below, please email us at support#nehcap.com [lwa][/s2If] [s2If current_user_can(access_s2member_level1)]

• NZD/USD slips below 0.6100 as China’s economy slows down.

The pair currently trades last at 0.60465.

The previous day high was 0.6118 while the previous day low was 0.6084. The daily 38.2% Fib levels comes at 0.6105, expected to provide resistance. Similarly, the daily 61.8% fib level is at 0.6097, expected to provide resistance.

NZD/USD slides sharply below the 0.6100 figure after data in China portrays a weak economic recovery after the country lifted its Covid-19 restrictions, sparking investor worries. Hence, traders braced for the safe-haven status of the US Dollar (USD), a headwind for the NZD/USD, which exchanges hands at 0.6051, down 1%, after hitting a daily high of 0.6109.

A subdued sentiment characterizes Tuesday’s session as global equities are slumping. Data in the Asian session showed that China, the second largest economy in the world, is struggling to gain traction, which turned the mood sour amongst investors. China’s Imports and Exports plunged below forecasts and June readings, pressuring the Government to provide additional stimulus.

The US economic docket showed the trade deficit shrinking in June, with Imports hitting a one-and-a-half-year low, as the US Commerce Department revealed. Exports came at $247.5 billion, below May’s $247 billion, while Imports dipped to $313 billion from $316.1 billion the prior’s month. Hence, the Trade Balance came at $-65.5, a tick higher than the $-65 billion estimated but below the previous reading of $-68.3 billion.

The NZD/USD reached a daily low after the US data release, while the US Dollar Index (DXY), a measure that tracks the buck’s performance against a basket of peers, advances 0.56%, at 102.650, weighing on the New Zealand Dollar’s (NZD) exchange rate.

Meanwhile, US Treasury bond yields are falling, as US central bank speakers shifted their tone toward a neutral policy stance, except for Federal Reserve (Fed) Governor Michell Bowman, saying that more rate increases are needed.

An absent New Zealand (NZ) economic docket would leave NZD/USD traders leaning toward China’s inflation data. If China’s CPI extends its downtrend, that would portray further economic weakness, suggesting the NZD could weaken further. On the US front, the release of July inflation data is much awaited by market participants, with estimates remaining unchanged compared to last month’s data.

The NZD/USD turned bearish since falling below the daily Exponential Moving Averages (EMAs) and is approaching the June 8 low at 0.6031, which, once cleared, the pair might test the 0.6000 figure. A breach of the latter will expose the year-to-date (YTD) low of 0.5985. If NZD/USD surpasses that level, the next stop would be the November 10 daily low of 0.5840. On the flip side, if NZD/USD buyers keep the pair above 0.6000, the first resistance would be the 0.6100 figure, followed by the August 4 high of 0.6133.

Technical Levels: Supports and Resistances

NZDUSD currently trading at 0.6047 at the time of writing. Pair opened at 0.6107 and is trading with a change of -0.98 % .

The pair remains strongly bearish on the daily time frame. It trades below the 20 SMA @ 0.621, 50 SMA 0.6166, 100 SMA @ 0.6192 and 200 SMA @ 0.6229.

The previous day high was 0.6118 while the previous day low was 0.6084. The daily 38.2% Fib levels comes at 0.6105, expected to provide resistance. Similarly, the daily 61.8% fib level is at 0.6097, expected to provide resistance.

Note the levels of interest below:

• Pivot support is noted at 0.6088, 0.6069, 0.6054
• Pivot resistance is noted at 0.6122, 0.6137, 0.6156

[/s2If]
Download Nehcap EAWe have two EAs that are operational on our LIVE accounts.

1. EA-FIX: Check out the details here. Download EA-FIX . EA-FIX is a non-grid HFT scalper.
2. EA-GROWTH: High quality low dd EA using trend grids. Download EA_GROWTHJoin Our Telegram Group