NZD/USD stays depressed below 0.6600 despite upbeat China GDP

• NZD/USD fails to keep the previous day’s positive performance even as Chinese GDP mark welcome numbers.
• China’s Q2 GDP and June month Industrial Production confront downbeat Retail Sales data.
• The shift in market sentiment, amid fresh US-China tussle, also weighs on the quote.
• A heavy economic calendar will join risk catalysts to offer a busy day.

NZD/USD recedes to 0.6560, down 0.21% on a day, after the market reacts to China’s headlines data during the early Thursday. The quote put a higher emphasis on the Retail Sales’ weakness than the strong figures of the second quarter (Q2) GDP and Industrial Production for June.

Read: Breaking: China’s GDP rebounds 3.2% YoY in Q2 vs. +2.1% expected, AUD/USD retakes 0.70 

The pair earlier reacted to the surge in Australia’s Unemployment Rate, from 7.1% to 7.4%, in June as well as increasing virus figures from Victoria. Also likely to have compressed the quote was the latest news suggesting increased tension between the US and China.

With the US indicating additional sanctions on Chinese diplomats, coupled with Beijing’s readiness to retaliate, market risk-tone sentiment seems to forget the vaccine-led optimism. On Wednesday, global traders cheered upbeat signals that the coronavirus vaccine is nearby.

Against this backdrop, S&P 500 Futures drop 0.30% to 3,210 while stocks in Asia-Pacific also register mild losses by the press time.

Traders will keep eyes on the macros concerning virus vaccine and further developments for the US-China story for immediate direction ahead of the European Central Bank’s (ECB) meeting and US data dump including Retail Sales, Jobless Claims and Philadelphia Fed Manufacturing Index.

Technical analysis

Pair’s repeated failures to rise past-0.6600 keeps the bears hopeful for witnessing June 23 top near 0.6530.