New Zealand Dollar resilient after China data tackles inflation. Analysis of NZD/USD, EUR/NZD, AUD/NZD, and GBP/NZD trends and uncertainties.
The New Zealand Dollar (NZD) showed resilience against the US Dollar (USD) following positive Chinese economic data released on Wednesday. The data surpassed expectations, boosting the risk appetite for NZD. The Chinese economy’s growth and better-than-expected industrial output and retail sales provided hope that the world’s second-largest economy might stabilize.
However, the NZD faced challenges due to lower-than-expected inflation in New Zealand’s third quarter, reducing the immediate need for further tightening. Inflation remains above the Reserve Bank of New Zealand’s target range of 1% -3 %, indicating that interest rates might stay higher for extended periods to bring inflation back within the target range.
Additionally, ongoing tensions in the Middle East have kept risk appetite in check, impacting the NZD, which is considered risk-sensitive.
New Zealand Dollar Gains Amid Positive China Data
In recent weeks, NZD/USD has held above the September low of 0.5850, indicating positive signs for bullish investors. To mitigate immediate downside risks, NZD/USD needs to surpass the hurdle at 0.6000-0.6050, including the early-September and early-October highs. A breakthrough could lead toward the 200-day moving average at around 0.6150.
Conversely, a drop below 0.5850 could open the door to the November 2022 low of 0.5750.
EUR/NZD found support at the 200-day moving average but faces resistance near the 89-day moving average and the upper edge of the Ichimoku cloud. Clearing this obstacle is essential to dissipate immediate downside risks. If unsuccessful, the June low of 1.7400 and the May low of 1.7150 could act as support levels.
AUD/NZD remains directionless, with a broad range between 1.05 and 1.11. The failure to sustain losses after breaking below critical support at 1.0720 indicates the lack of a clear trend. AUD/NZD must break above 1.11 or below 1.05 for a new direction to emerge.
GBP/NZD’s rebound could lose momentum as it approaches resistance at the 89-day moving average and the Ichimoku cloud. The break below the uptrend line from February suggests diminished upward pressure. A drop below the September low of 2.0275 might pave the way toward the May low of 1.9750.