AUD/USD, NZD/USD, USD/CNY – Asian Session Daily ForecastSluggish start to week, as NZ and Australian dollar unchanged. Chinese yuan ticks higher despite weak Chinese manufacturing, retail sales data.
AUD/USD, had a quiet week, and is almost unchanged on Monday. In Asian trade, AUD/USD is trading at 0.6875, down 0.04% on the day. With no major events on Monday, we could see the lack of movement continue throughout the day.
Investors Await RBA Minutes
Early on Tuesday, the RBA will release the minutes of its policy meeting earlier in September Investors will be trying to assess the mood of the RBA. In the rate statement at the September meeting, policymakers sounded cautiously optimistic about the domestic economy, while noting concerns about global trade tensions. Keeping in mind that AUD/USD has posted gains of over 2.0% in September, the RBA can contemplate lowering interest rates without worrying about the negative effect on the exchange rate. At the September meeting, RBA Governor Philip Lowe hinted that rate levels would remain low in the near future, and this message will likely be reiterated in the minutes. Traders should treat the minutes as a market-mover, so we could see stronger movement from AUD/USD ahead of this release.
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AUD/USD Technical Analysis
AUD/USD continues to flirt with the 0.6865. This line remains fluid and is currently an immediate support line. I expect this line to remain relevant during the Monday session. The next support level is at 0.6805. On the upside, 0.6912 appears comfortable in resistance. It has not been tested since July 26.
USD/CNY ended the week on a quiet note and is showing limited movement in Monday’s Asian session. Currently, the pair is trading at 7.0785, down 0.10% on the day.
China Manufacturing, Retail Sales Miss Mark
It was a soft start for Chinese fundamentals on Monday, but the yuan has shrugged off the weak August numbers. Industrial Production fell to 4.4%, its lowest level since 2009. Retail sales ticked lower to 7.5%, down from 7.6% a month earlier. This was well short of the estimate of 7.9%. The U.S-China trade war continues to take its toll on the Chinese economy, and if this week’s Chinese data continues to miss expectations, the yuan could lose ground.
USD/CNY Technical Analysis
USD/CNY broke through support at 7.1100 on Thursday, after flirting with this line throughout the week. I was concerned about a possible retracement, but this hasn’t occurred, and support at 7.0592 appears vulnerable after last week’s losses. USD/CNY could test this line, which has held since August 22, as early as Tuesday. On the upside, there is resistance at 7.1702, which has strengthened in resistance as USD/CNY has moved downwards.
NZD/USD ended the week on a whimper and the lack of activity has continued on Monday. In the Asian session, the pair is trading at 0.6385, up 0.02% on the day.
Ahead – Consumer Confidence
Consumer confidence has dipped, as the New Zealand economy has been hit by weak global conditions and U.S-China trade war. We’ll get a look at Westpac Consumer Sentiment, a quarterly release, later on Monday. In Q1, the indicator dipped to 103.5, as it slowed for a second straight month. Another drop could sour risk appetite and send weigh on the NZ dollar.
NZD/USD Technical Analysis
NZD/USD continues to be exhibit range trade, as the pair is showing little inclination to break out in either direction. On the upside, 0.6425 is immediate resistance. This line was active last week and remains relevant. There is support at 0.6325, which has held since September 3. The pair leveled out on Friday and has shown little enthusiasm at the start of the week. I do not expect any significant movement on Monday.