NZD/USD struggles to defend the first daily gains in three aroud 0.6200 despite upbeat China data

• NZD/USD initially refreshed intraday high before retreating of late.
• China Q1 GDP matches market forecasts, Retail Sales and Industrial Production also improve in March.
• Hawkish Fed bets, cautious mood ahead of New Zealand Q1 CPI prod Kiwi pair buyers.

NZD/USD seesaws around 0.6180, recently easing from an intraday high, as bulls remain unconvinced despite upbeat China data during early Friday. The reason could be linked to the hawkish Fed bets and cautious mood ahead of Zealand Q1 Consumer Price Index (CPI).

China’s Q1 GDP grows 2.2% QoQ versus the 2.2% expected and 0.0% prior. Further, Retail Sales growth jumps 10.9% YoY in March versus 7.4% expected and 3.5% prior whereas Industrial Production eased below 4.0% expected growth figures to 3.9%, versus 2.4% previous readings.

Also read: Breaking: China data dump: GDP beat by 0.5% vs expectations, Retail Sales, big beat 10.6% vs 7.4%

On the other hand, recently firmer US data propel the market’s bets on the 0.25% Fed rate hike in May, as well as cut the odds of a rate reduction from the US central bank sometime in late 2023. Not only the data but Fed talks and upbeat yields also favored the hawkish Fed bets and favored the US Dollar, which in turn weighs on the NZD/USD prices.

It should be noted that the Reserve Bank of New Zealand (RBNZ) surprised markets with a 0.50% rate hike in its latest monetary policy meeting, which in turn escalates the importance of this week’s NZ CPI, expected to rise to 2.0% QoQ versus 1.4% prior.

That said, mixed concerns surrounding the US-China tussles over Taiwan and the doubts about recession also prod the NZD/USD buyers of late.

While portraying the mood, S&P 500 Futures remain directionless whereas Australia’s ASX 200 prints a 0.30% intraday loss by the press time.

Moving on, the US Housing Starts and Building Permits for March will be important to watch for intraday directions. However, major attention will be given to New Zealand’s quarterly CPI, up for publishing on Thursday, as well as Friday’s US PMIs for April.

Technical analysis

A daily closing below the 200-DMA, around 0.6160 by the press time, becomes necessary for the NZD/USD bear’s conviction.