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

It’s been a sleepy start to the Friday session, with little movement from the Australian, NZ or Chinese currencies. With no fundamentals on Friday for the markets to chew on, I expect a quiet trading day as we wrap up the week.
Kenny Fisher

AUD/USD

AUD/USD is slightly higher in Friday trade. In the Asian session, the pair is trading at 0.6805, up 0.20%.

Aussie Halts Slide

AUD/USD hit some turbulence in mid-week, declining over 1.0% over Wednesday and Thursday. The catalyst for the drop was a surprise rise in the August unemployment rate, which rose from 5.2% to 5.3%. This was the highest jobless rate since last September. An increase in unemployment is another sign that the RBA could lower interest rates in October, which would be bearish for the Aussie. The pair has stemmed the slide on Friday, posting slight gains.

AUD/USD Technical Analysis

AUD/USD continues to flirt with the 0.6805 line, which has remained relevant throughout the week. The pair has tested this line but does appear to have the strength to break higher at the current time. This pattern could continue in the European and North American sessions. Below, there is immediate support at 0.6760. On the upside, 0.6839 has strengthened in resistance as the Aussie continues to lose ground.

AUD/USD 4-hour Chart

USD/CNY

USD/CNY is showing limited movement on Friday. In the Asian session, the pair is trading at 7.0832, down 0.19%. This has erased the gains seen on Thursday.

Yuan Continues to Drift

China started the week with soft manufacturing and retail sales data, but there have been no major indicators for the remainder of the week. In the U.S., a lack of major events meant that the Federal Reserve rate decision was in the spotlight, but the second rate cut this summer did not have much impact on the currency markets and the Chinese yuan had a quiet week, showing little inclination to make a move in either direction. With no fundamental releases on Friday, I expect the yuan to remain range-bound for the remainder of the day.

USD/CNY Technical Analysis

The Chinese yuan remains range-bound, and resistance at 7.1100 continues to be a major obstacle for the pair. Above, there is strong resistance at 7.1700. On the downside, there is support just below 7.600, at 7.0592. It’s been a quiet week for USD/CNY and I don’t expect any significant movement before next week.

USD/CNY 4-Hour Chart
NZD/USD

NZD/USD is flat in Friday trade. In the Asian session, the pair is trading at 0.6296, up 0.04% on the day. It’s been a rough week for the kiwi, which has dropped 1.4%.

Consumer Spending Climbs

There was positive news on Friday, as New Zealand credit card spending improved to 6.0% in August, up sharply from 5.0% a month earlier. Consumer spending is a key driver of economic activity, and the strong reading has helped NZD/USD stem this week’s nasty slide. Still, weak global conditions and a slowdown in the Chinese economy due to the trade war with the U.S. has hampered the New Zealand economy, and this was evident in GDP for the second quarter, which on an annualized basis dropped to 2.1%, its lowest level since 2013. The NZ dollar may eke out some small gains on Friday, but I expect the currency to remain under pressure early next week.

NZD/USD Technical Analysis

The NZ dollar broke below support at 0.6325 on Wednesday but has been unable to continue any downward movement. NZD/USD is within striking distance of support at 0.6280, but this resilient line has held firm since September 3. On the upside, the next resistance line is 0.6360. Above, 0.6425 is a major resistance line.

NZD/USD 4-Hour Chart

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