NZDUSD Probing Key Floor Ahead of MidMonth Chinese Data Dump

Markets are trading with a slight risk-off tone as we go to press, with the US dollar clocking in as the strongest major currency while aussie and kiwi bring up the rear.

Today’s drop in NZD/USD leaves the pair at a particularly interesting level: rates are testing critical previous support and their 3-month lows around 0.6720. A break and daily close below this level (ideally accompanied by a corresponding breakdown in the RSI indicator) could open the door for another leg lower, with bears potentially targeting the 61.8% Fibonacci retracement of the Q4 rally near 0.6630 next:

Source: TradingView, FOREX.com

From a fundamental perspective, there’s little in the way of direct US or New Zealand data on tap, but China’s mid-month data dump will have a major impact on the kiwi. Readers should keep a close eye on China’s trade balance figure ahead of the weekend, as well as the GDP report over the weekend and Industrial Production figures in Wednesday’s Asian session.

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