NZD/USD: flirting with key resistance

• The NZD/USD is seeking acceptance above the key resistance at 0.6851 (May 16 low), having scaled 0.6830 (38.2% Fib R of 0.7060-0.6688).
• An above forecast China PPI is good news for the NZD.

The NZD/USD is mildly bid in Asia and is looking to scale the key resistance at 0.6851 (May 16 low) in a convincing manner.

A daily close above the key hurdle would validate the pair's move above 0.6830 (38.2% Fib R of 0.7060-0.6688) and embolden calls for a stronger rally towards the 50-day moving average (MA), currently lined up at 0.6921.

The New Zealand electronic card retail sales data released earlier today carried a strong headline, but the details revealed the 0.8 percent month-on-month rise seen in June and an upwardly revised 0.6% m/m lift in May were insufficient to offset April’s 2.2% decline. The murky details of the retail sales data could be capping the upside in the NZD/USD around 0.6851.

That said, a better-than-expected China producer price index (PPI) - a good indicator of demand for commodities - released a few minutes ago could make way for a solid break above 0.6851.

NZD/USD Technical Levels

Resistance: 0.6851 (May 16 low), 0.6921 (50-day moving average), 0.70 (psychological level).

Support: 0.6832 (session low), 0.6814 (5-day moving average), 0.6787 (10-day moving average).