NZD/USD extends pullback from three-day low despite downbeat China inflation data

• NZD/USD bounces off intraday low despite weaker than forecast China CPI/PPI.
• Fears of US-China trade war, risks of the coronavirus resurgence weigh on the quote.
• US data, trade/virus updates can offer intermediate moves ahead of the RBNZ.

NZD/USD takes the bids to 0.6065, down 0.16% on a day, after China released April month inflation data during early Tuesday. The pair seems to witness pullback ahead of tomorrow’s key RBNZ while ignoring the latest downbeat data, risk-off sentiment.

China’s April month Consumer Price Index (CPI) slips below -2.6% forecast to -3.1% on YoY whereas Producer Price Index (PPI) grew a less than 3.7% expected to 3.3% on the annualized basis.

Read:

That said, the pair dropped during the early-Asian session after US President Donald Trump renewed the US-China trade war fears.

Also weighing on the market’s risk-tone, as well as the commodity-linked currencies, are the fears of the likely increase in the coronavirus (COVID-19) cases amid the latest reopening of the economies.

NBC came out with the unconfirmed numbers from the White House that suggested a spike in the virus cases off-late.

Amid all these, the US 10-year Treasury yields drop 2.6 basis points (bps) to 0.70% whereas stocks in Asia register mild losses.

Moving on, US inflation figures and Fedspeak can direct short-term moves of the kiwi pair ahead of tomorrow’s key RBNZ meeting. While the RBNZ isn’t expected to alter the present monetary policy, quarterly economic forecasts and tone of central bank policymakers will be important to watch.

Read: RBNZ MPS Preview: Expected to keep rates unchanged at 0.25%

Technical analysis

The failure to cross April 30 top near 0.6175/80 drags the Kiwi pair further down towards a 13-day old rising support line, currently around 0.6015. Though, a break of which can push the bears to challenge an ascending trend line from April 03, at 0.5965 now. Meanwhile, a 100-day EMA level of 0.6195 adds to the upside barriers beyond the April top.