FxWirePro: NZD/USD slips below 38.2% Fib, poised for more weakness

Chart - Courtesy Trading View 

Spot Analysis:

NZD/USD was trading 0.17% lower on the day at 0.6830 at around 06:20 GMT.

Previous Week's High/ Low: 0.7034/ 0.6822

Previous Session's High/ Low: 0.6892/ 0.6822

Fundamental Overview:

China CPI and PPI data released earlier on Monday stoke stagflation fears in the Chinese economy which is hurting the antipodeans.

Data from the National Bureau of Statistics showed that China’s consumer price index for March grew 0% m/m, above forecasts at -0.1% and compared to the previous month’s growth at 0.6%.

CPI grew 1.5% y/y, also beating estimates at 1.2% and the previous month’s 0.9% growth.

China's producer price index grew 8.3% y/y, as compared to forecasts at 7.9% growth and 8.8% recorded during the previous month.

On the other side, the US dollar remains bid ahead of Tuesday's CPI data. Estimates are on the higher side at 8.3%, which if true will add pressure on the Fed to adopt a tight policy environment.

Technical Analysis:

- NZD/USD extends weakness below 200-DMA

- Price action slips below 38.2% Fib

- Momentum is bearish, Stochs and RSI are sharply lower

- MACD and ADX support further downside in the pair

Major Support and Resistance Levels:

Support - 0.6794 (50-DMA), 0.6781 (50% Fib), 0.6725 (Daily cloud)

Resistance - 0.6841 (38.2% Fib), 0.6884 (5-DMA), 0.6903 (200-DMA)

Summary: NZD/USD trades with a bearish bias. Scope for test of 50-DMA at 0.6794 ahead of 50% Fib at 0.6781. Daily cloud offers strong support, further weakness only on break below.