NZD/USD – Bears run out of steam after upbeat China data

Upbeat China economic data and the resulting improvement in the risk sentiment as highlighted by the rise in the AUD/JPY cross helped stall the bearish momentum in  the NZD/USD pair around 0.7142.

Spot on recovery mode

The spot is on the recovery mode, now trading around 0.7185 levels. NZD and other commodity dollars were trading on the back foot in early Asia as markets were expecting the China data to show deceleration in the economic activity. This coupled with overbought conditions in the NZD led to an early drop in the pair.

However, markets were caught off guard by the better-than-expected China GDP, industrial production and retail sales figure. The improvement in the risk sentiment may continue to support NZDUSD in Europe and ahead of the US advance retail sales data release.

NZD/USD Technical Levels

The immediate resistance is seen at 0.7201 (daily high), above which the spot could target 0.7235 (5-DMA). A violation there could yield 0.7255 (June 23 high). On the other hand, a breakdown of support at 0.7175 (previous day’s low) could yield re-test of 0.7142 (daily low), under which the psychological support of 0.71 could be put to test.