AUD/USD, NZD/USD, USD/CNY – Asian Session Daily ForecastAustralian business confidence slips, Chinese inflation mixed, NZ dollar flat
AUD/USD – Business Confidence Falters
AUD/USD is down slightly in Tuesday’s Asian session, as the pair is trading at 0.6850, down 0.15% on the day. On Monday, the pair touched a high of 0.6876, its highest level since July 31. The pair showed gains on Tuesday after a strong showing by Home Loans, which surged 5.0%. This marked the strongest gain since 2009.
On Tuesday, Australian NAB Business Confidence fell to 1 in August, down sharply from 4 a month earlier. This indicates a worrisome deterioration in business conditions. We’ll get a look at Westpac Consumer Confidence late Tuesday. The indicator climbed 3.6% in August, and investors are hoping for another strong reading. Otherwise, the Aussie could weaken.
AUD/USD Technical Analysis
AUD/USD continues to exhibit range trading this week, as the pair appears comfortable in mid-68 territory. Still, an upward breakout is certainly possible, as 0.6865 has been tested in the Asian session. If the pair can break through this line, the AUD/USD could make a move towards major resistance at 0.6988. On the downside, 0.6805 has been providing support since last week. This is followed by 0.6686, which is a major support level.
USD/CNY – Yuan Flat on Mixed Inflation Data
Investors were keeping a close eye on Chinese inflation reports for August, and the results were mixed. Consumer inflation (CPI) climbed 2.8%, beating expectations of 2.6%. The catalyst for the strong gain was a sharp rise in food prices. On the other hand, the Producer Price Index (PPI) declined 0.8%, marking the third month without a gain. These weak readings are due to the trade war with the U.S., which has taken a toll on the Chinese economy. China is expected to release New Home Loans, a key economic indicator, sometime during the week.
USD/CNY Technical Analysis
It has been a quiet start to the week for the USD/CNY, which gained 0.11% on Monday. The pair has dipped 0.09% in Tuesday’s Asian session and is currently trading at 7.115. With the yuan continuing to exhibit range trade, I would expect the lack of activity to continue until later in the week, when we’ll have some key U.S. reports to work with.
On the upside, there is resistance at 7.1702, which was an active line last week. There is immediate support at 7.1100. This line could be tested if the pair heads lower.
NZD/USD – Kiwi Keeping Quiet
With no major events in the U.S. or New Zealand on Tuesday, it’s shaping up to be an uneventful day for NZD/USD. In Tuesday’s Asian session, the pair is up 0.05%. The NZ dollar climbed 2.0% last week, but the rally fizzled out on Friday. There is no indication of another strong breakout, so I would expect the lack of activity to continue until the U.S. releases major data, starting on Thursday, with inflation and unemployment claims.
NZD/USD Technical Analysis
NZD/USD was marked by an upward trend line on Friday, but the pair has been flat since then.
I am keeping a close eye on support at 0.6425, which is under strong pressure. This line could break at any time, which would leave room for the dollar to push lower into 63-territory. The next major support line is at 0.6250. On the upside, the round 0.6500 is the next resistance line.