NZD/USD unimpressed by China inflation, keeps losses near 0.7270

The bears retained control following the release of the Chinese price pressures data, pushing the NZD/USD pair deeper in the red zone below key support located at 0.7280 levels, the confluence of 5 & 10-DMA.

NZD/USD targets Thursday’s 0.7240?

Having failed an attempt above 0.73 handle last Friday, the spot continues to trade in the lower bound of the recent trading range, as unimpressive China’s macro news, including the services PMI and inflation data, weigh negatively on the Kiwi. China is New Zealand’s biggest trading partner.

 China’s Caixin June Services PMI surprises negatively

Chinese June inflation y/y in line with exp, monthly reading a slight miss

Moreover, a solid rebound staged by the US dollar on Friday also adds to the downward pressure on the major. However, further losses appear capped amid a better risk environment, with oil prices and Asian equities setting off a brand new week on a firmer footing.

Looking ahead, we have a big week ahead for the Kiwi, as a slew of crucial Chinese data are due on the cards, alongside the US CPI, retail sales and industrial figures. In the meantime, markets await the US LMCI data slated for release later today for fresh impetus.

NZD/USD Levels to consider                                                                              

NZD/USD failed to hold 0.7280 support, however, a test of 0.7295/0.7300 (10-DMA/ round figure) still on the cards. Beyond which 0.7376 (Feb high) will be on sight. To the downside, 0.7247/42 (Jun 23 & Jul 6 low) guards 0.7200 (psychological levels) and a break back below 0.7160 (50-DMA) are key near-term downside areas.