New Zealand Dollar, Second Quarter Retail Sales, US Dollar, Crude Oil, Technical Outlook – TALKING POINTS
- Asia-Pacific markets could see a quiet trading session as traders prepare for Jackson Hole
- New Zealand retail sales in the second quarter fell on a quarterly and annual basis
- NZD/USD is trading below its 50-day SMA but holding above a key Fibonacci level
Thursday’s Asia-Pacific Outlook
Asia Pacific markets are poised for a calm open after a low volatility overnight trading session in New York. U.S. stocks posted marginal gains as traders braced for remarks from Federal Reserve Chairman Jerome Powell on Friday from Jackson Hole. Treasury yields rose, indicating hawkish expectations for this weekend’s event. Stock traders also pulled back over the past week in anticipation of the event.
According to China’s state broadcaster CCTV, the Chinese government plans to release a package of economic measures aimed at supporting growth and stability. State media cited a meeting that included Premier Li Keqiang. The 19 new policy measures include increasing policy funding tools by 300 billion yuan, among other policy tools. China’s CSI-300 fell almost 2% on Wednesday.
The DXY US Dollar Index was supported by rising Treasury yields. EUR/USD remained below parity and GBP/USD fell around 0.3%. APAC currencies, including the Australian dollar and New Zealand dollar, were also weaker against the dollar. Second estimates of second-quarter US GDP growth and initial data on jobless claims could influence the greenback ahead of PCE inflation data and Mr. Powell’s speech. New Zealand retail sales in the second quarter fell 3.7% year-on-year.
Copper and iron ore prices fell despite the support measures from China that were revealed. WTI and Brent crude oil prices rose as markets mull over a possible OPEC production cut. However, this reduction would likely only come if negotiations between Iran and the United States were successful, allowing Iranian oil to flow into world markets. A surprise drop in US equities also helped support crude prices.
NZD/USD Technical Outlook
NZD/USD is holding above its 23.6% Fibonacci retracement level after falling overnight. The short-term outlook remains bearish, with prices trading below the 50-day simple moving average (SMA), while the RSI and MACD oscillators are slowing below their respective midpoints. A break below the 23.6% Fib could threaten the July low at 0.6060.
NZD/USD daily chart
Chart created with TradingView
— Written by Thomas Westwater, Analyst for DailyFX.com
To contact Thomas, use the comments section below or @FxWestwater on Twitter