NZD/USD working hard to stay above 0.72 handle

NZD/USD is working hard to stay above 0.72 handle amid broad based USD strength in Asia ahead of China data and US data release.

Immediate focus on China data

The immediate focus is on the China data, which is expected to show retail sales increased 10.5% y/y in July, while industrial production increased 6.2%. China data usually has more influence on commodity dollars – AUD, NZD and also influences overall market sentiment.

Later in the day, the US retail sales number may affect Fed rate hike bets and thus affect overall demand for the US dollars. At the time of writing, the spot was trading around 0.7205 (38.2% of July 2014 high – Aug 2015 low).

NZD/USD Technical Levels

A break above immediate resistance at 0.7256 (Aug 2 high) would open doors for a rally to 0.7298 (June 24 high). A violation there could yield 0.7325 (July 12 high). On the other hand, a breakdown of support at 0.7178 (5-DMA) would expose support at 0.7119 (50-DMA) and 0.7087 (Aug 8 low).