NEW ZEALAND DOLLAR, Q2 RETAIL SALES, US DOLLAR, CRUDE OIL, TECHNICAL OUTLOOK – TALKING POINTS
- Asia-Pacific markets may see a quiet trading session as traders prepare for Jackson Hole
- New Zealand’s second-quarter retail sales fell on a quarterly and annual basis
- NZD/USD trades below its 50-day SMA but holds above a key Fibonacci level
THURSDAY’S ASIA-PACIFIC OUTLOOK
Asia-Pacific markets are set for a calm open after a low-volatility trading session overnight in New York. US stocks saw marginal gains as traders prepare for remarks from Federal Reserve Chair Jerome Powell on Friday from Jackson Hole. Treasury yields rose, indicating hawkish expectations for this weekend’s event. Equity traders have also stepped back over the past week in anticipation of the event.
According to China’s state broadcaster CCTV, the Chinese government is planning to release a package of economic measures aimed at underpinning growth and stability. The state media cited a meeting that included Premier Li Keqiang. The 19 new policy measures include raising policy financing tools by 300 billion Yuan, among other policy tools. China’s CSI-300 fell nearly 2% on Wednesday.
The US Dollar DXY Index was buoyed by higher 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 USD. The second estimates for US second-quarter GDP growth and initial jobless claims data may influence the Greenback ahead of PCE inflation data and Mr. Powell’s speech. New Zealand’s second-quarter retail sales fell 3.7% on a year-over-year basis.
Copper and iron ore prices fell despite the supportive measures out of China coming to light. WTI and Brent crude oil prices rose as markets mull a potential OPEC production cut. However, that cut would likely come only if negotiations between Iran and the United States succeed, which would allow Iran’s oil to flow into global markets. A surprise decline in US stocks also helped support crude prices.
NZD/USD TECHNICAL OUTLOOK
NZD/USD is holding above its 23.6% Fibonacci retracement level after an overnight drop. The short-term outlook remains bearish with prices tracking below the 50-day Simple Moving Average (SMA), while the RSI and MACD oscillators moderate below their respective midpoints. A break below the 23.6% Fib may threaten the July swing low at 0.6060.
NZD/USD DAILY CHART
Chart created with TradingView