NZD/USD Drops on Weak Chinese Data, Bearish Bias Intact

16 May 2023

Disappointing Chinese Economic Data Pushes NZD/USD Below 0.6250, Confirming Bearish Bias

The NZD/USD pair experienced a significant drop below the key level of 0.6250 following the release of weaker-than-anticipated annual Retail Sales data by the National Bureau of Statistics of China. The data revealed that the economic expansion in April stood at 18.4%, falling short of the forecasted 21.0%, although it did surpass the previous release of 10.6%.

Additionally, the annual Industrial Production data for April landed within the estimated range of 10.9% but exceeded the former release of 3.9%, registering a growth rate of 5.6%. This slower growth in both retail demand and industrial production suggests that the Chinese economy is making progress in the right direction following the easing of full lockdown measures.

From a technical perspective, the NZD/USD pair has initiated a new bearish impulse aligned with the prevailing downtrend. This downward movement was triggered when the price reached the 38.2% Fibonacci continuation level. As a result, our bias for the NZD/USD pair remains bearish, indicating a potential further decline in the near future.