The New Zealand dollar felt some pressure as it tested its September 30 low recovering to 0.6370 against the US dollar. Support and resistance level for the NZD/USD pair are now at 0.6331 and 0.6485 respectively.

Consumer sentiment in Australia deteriorates

The Australian dollar also lost strength against the U.S. dollar, leaving it trading near 6-year lows. The pair shed 0.85% to settle at 0.6850. The weakness in AUD/USD was driven by softer Australian consumer sentiment data that dipped 3.5% sequentially in January while global outlook continues to be a concern. The pair is likely to find support at 0.6823 and resistance at 0.6962. The Aussie dollar traded sharply lower against the euro, with EUR/AUD marching up by 1.27% to 1.5987.

Declining Chinese growth remains a concern in the backdrop following the new numbers released yesterday. The annual GDP growth in China fell to 6.8% from 6.9% in the previous quarter. Though the numbers met expectations, it reconfirms beliefs that the world’s second-largest economy is not keeping up the pace.

Oil bounce fades as crash continues

The sharp decline in oil prices to a level below $28 a barrel today has further dampened the global economic growth outlook. The International Energy Agency (IEA) has projected that the oil market will remain oversupplied until the end of 2016. The report has disappointed investors who were expecting a bounce in oil prices in the coming months.

Later today, all eyes will be set on the US consumer price index, which will help decide the direction of the US dollar. It is expected that core inflation will rise to 2.1% on an annual basis. A strong CPI data point can serve as an indication for a rate hike by the Federal Reserve, which can push the greenback higher.