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

Kenny Fisher

Fri, Sep 13, 2019, 1:04 AM

AUD/USD

It’s been an uneventful week for AUD/USD, and the pair is looking sleepy on Friday as well. In Asian trade, AUD/USD is trading at 0.6872, up 0.13% on the day. The pair has recovered almost all of the losses sustained on Thursday.

Will U.S. Retail Sales Weigh on Aussie?

With no Australian events to close out the week, traders should keep a close eye on U.S. retail sales reports, which will be released later on Friday. These indicators are potential market-movers, and the markets are bracing for very soft August readings. The headline release is projected to drop to 0.2%, down from 0.7% a month earlier. Core retail sales is forecast to slow to 0.1%, after a sparkling gain of 1.0% in July. A slowdown in retail sales would indicate weaker consumer spending, and this could sour risk appetite and push AUD/USD lower.

AUD/USD Technical Analysis

Despite the recent lack of movement from AUD/USD, it’s been an interesting week, as the pair continues to flirt with the 0.6865. This line remains fluid, and is currently an immediate resistance line. If AUD/USD can break above this line, there is room for an upside move, with no resistance until 0.6921. Although the Asian session has been uneventful, some stronger movement is still a possibility in the European or North American sessions.

On the downside, 0.6805 has strengthened, with AUD/USD posting modest gains this week. This is followed by 0.6686, which is a major support level.

AUD/USD 4-Hour Chart

USD/CNY – Yuan Hits 3-Week High

The Chinese yuan flexed some muscle on Thursday, after showing little movement during the week. USD/CNY dropped 0.53% on Thursday, but has leveled off. In Friday’s Asian session, the pair is trading at 7.0773, down 0.02%.

U.S. Consumer Inflation Falls

The yuan took advantage of weak U.S. inflation in August. The consumer price index fell to 0.1%, down from 0.3% in August. Weak inflation points to slower activity in the U.S. economy, and investors showed their displeasure by dumping U.S. dollar assets in favor the yuan.

U.S. Retail Sales – Will Yuan Push Higher?

All eyes are on U.S. retail sales, one of the most important economic indicators. In August, retail sales are projected to drop to 0.2%, down from 0.7% a month earlier. Core retail sales are forecast to slow to 0.1%, after a sparkling gain of 1.0% in July. If the forecasts are on target and retail sales show a sharp slowdown, this could result in a repeat performance for the yuan, which could gain more ground against the greenback.

USD/CNY Technical Analysis

USD/CNY broke through support at 7.1100 on Thursday, but is it firmly in the yuan’s rearview mirror? I would like to see the pair drop further and avoid a retracement on Friday. If this happens, then the pair has room for a downward breakout, with no support in sight until 7.0592. On the upside, there is resistance at 7.1702, which was an active line last week. It has strengthened in resistance as USD/CNY has moved downwards.

USD/CNY 1-Day Chart

NZD/USD – Lackluster Week Continues

NZD/USD has not shown much movement throughout the week, and the lack of activity has continued on Friday. In the Asian session, the pair is trading at 0.6406, up 0.07% on the day.

Manufacturing Index Contracts

The final New Zealand indicator of the week disappointed, as Business NZ manufacturing index remained in contraction mode for a second straight month, with a reading of 48.4 points. The U.S-China trade war has hurt New Zealand’s export sector and weakened demand for manufactured goods. The NZ dollar did not react, but if upcoming manufacturing data continues to point downwards, the currency could lose ground.

U.S. Retail Sales Could Shake Sleepy Kiwi

The week wraps up with U.S. retail sales, which should be treated as a market-mover. In August, retail sales are projected to drop to 0.2%, down from 0.7% a month earlier. Core retail sales are forecast to slow to 0.1%, after a sparkling gain of 1.0% in July. Soft readings for retail sales could spell bad news for the NZ dollar, as if investors could get nervous and stick to the safety of the U.S. dollar, at the expense of risk currencies like the NZ dollar.

NZD/USD Technical Analysis

NZD/USD has shown limited movement throughout the week, and the pair continues to hover close to the 0.6425 line. Currently, this line is immediate resistance. If the pair can put some distance between it and this line, I would expect to see a breakout, as NZD/USD has some room to move in either direction. The next major support line is at 0.6250. On the upside, there is resistance at the round number of 0.6500.