AUD/USD, NZD/USD, USD/CNY – Asian Session Daily Forecast

It is red across the board, as the New Zealand, Australian and Chinese currencies have all posted modest gains against the U.S. dollar. With no key indicators on the schedule, it could be a lackluster session on Tuesday.
Kenny Fisher
EUR/USD daily chart, September 17, 2019

AUD/USD

AUD/USD has recorded losses for a second straight day. Is this the start of a pronounced slide by the Aussie? In the Asian session, AUD/USD is trading at 0.6840, down 0.31% on the day.

Dour RBA Minutes Weigh on Aussie

The RBA minutes were somewhat pessimistic, but the damage to the Aussie could have been worse. Board members expressed concerns about the global economy, stating that the risks over global growth remain tilted to the downside. On the domestic side, the minutes stated that wage growth had slowed, which was hampering the labor market. The RBA has kept open the  possibility of further rate cuts, and there is a good chance that the bank will make a move in November, barring a strong improvement in the Australian economy. This dovish stance will not make the Australian dollar particularly attractive to investors.

On the housing front, the House Price Index fell by 0.7% in the second quarter, the sixth straight quarter marked by a decline. This points to persistent weakness in the housing sector, and this will likely weigh on the critical construction industry.

AUD/USD Technical Analysis

AUD/USD has tested the 50-day moving average support at 0.6849. Will the pair continue to move lower? The next support line is at 0.6805. This is not a strong line, and is within striking distance of the pair. On the upside, 0.6865 remains relevant. It is currently an immediate resistance line and it could face pressure during the day.

AUD/USD 4-Hour Chart

USD/CNY

USD/CNY has reversed direction on Tuesday, posting gains of 0.35% . In the Asian session, the pair is trading at 7.089, up 0.34% on the day.

Investors Eye Federal Reserve Meeting

There are no major Chinese events for the remainder of the week, and only a handful of major U.S. indicators. This will leave the markets plenty of time to digest the Federal Reserve meeting on Wednesday. If policymakers hint at another rate cut in the near future, the greenback could lose ground.

The U.S-China trade war continues has hampered the Chinese economy, and this was evident in weak Chinese data on Monday.  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%. If Chinese numbers continue to head lower, investors may become sour towards the Chinese yuan.

USD/CNY Technical Analysis

The dollar has flexed some muscle on Tuesday, which has been a rarity in September. The pair currently is within striking distance of resistance at 7.1100. If the pair can break through this resistance line, I would expect a breakout to higher ground. On the downside, 7.0592 has some breathing room, with the pair posting gains on Tuesday.

USDCNY 4-Hour Chart

NZD/USD

NZD/USD has posted modest losses on Tuesday, continuing the downward trend which started the week. In the Asian session, the pair is trading at 0.6331, down 0.17% on the day. The pair has slipped to its lowest level since September 2.

NZ Consumer Confidence Falls to 7-year Low

Westpac Consumer Sentiment, a quarterly release, started the new trading week on a down note. The indicator slowed to 103.1 in Q2, down from 103.5 in Q1. This marked a third successive drop. More importantly, it was the lowest reading since 2012. Consumers remain edgy about weak global conditions, and the NZ economy is also showing weakness in the business and housing sectors. Weak consumer confidence often translates into a reduction in consumer spending, which could have a significant negative impact on the economy and on the NZ dollar. We’ll get a look at New Zealand GDP on Wednesday.

NZD/USD Technical Analysis

With NZD/USD moving downwards this week, there is strong pressure on support at 0.6325. This line has managed to remain intact since September 3, but could be tested on Tuesday. On the upside, 0.6425 has strengthened in resistance as the pair pushes downwards.

NZD/USD 4-Hour Chart

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