- NZD/USD has broken onto the 0.67 handle in early Asia on the back of NZ retail sales data for Q2 beating expectations with a strong outcome.
- The move has extended the upside from overnight markets and the correction that got underway mid-last-week from down the 0.6540s.
- NZD/USD is currently trading at 0.6710 having made a fresh high of 0.6721.
As for the data, this came in as +1.1% q/q vs the expected +0.3% q/q and prior +0.1% – a big beat and this has taken the 21-D SMA out – (When the train is on a role, get out of the way). There has been a large supply in the greenback that could be set to continue for a test down to 94.80 on the charts in the DXY. For that reason, the commodities and antipodeans have been able to recover lost ground for the month of August, so far.
Meanwhile, the data from overnight was not supportive of a bid in the NZD and that was in the GDT price index. It was another negative input for the bird, -3.6%, and indeed, New Zealand dairy prices down more than 10% since May.
The general improved tone in risk sentiment has helped the bird to recover from the 0.6540s
Instead, the general improved tone in risk sentiment has helped the bird to recover from the 0.6540s. Wall Street ended the day modestly higher, but the S&P 500 eases off record highs as investors continue to cheer US/China trade truce prospects ahead of this week’s meeting between officials, that the WSJ said was a China Plot Road Map to resolve trade dispute by November’s.
“Scheduled midlevel talks in Washington next week, which both sides announced on Thursday, will pave the way for November. A nine-member delegation from Beijing, led by Vice Commerce Minister Wang Shouwen, will meet with U.S. officials led by the Treasury undersecretary, David Malpass, on Aug. 22-23. The negotiations are aimed at finding a way for both sides to address the trade disputes, the officials said, and could lead to more rounds of talk,” – WSJ
NZD/USD levels
Resistance is located at 0.6750 through this 21-D SMA at 0.6703. There is the possibility of a stretch towards 0.6860 that guards territory towards 0.6920 as the June high. The 200-month moving average resistance is at 0.7019. However, on the downside, a break back below the 10-D SMA at 0.6616 opens 0.6510/50. This area guards a run to the 0.6470s and below there, 0.6240 remains as a big level that protecting the double bottom lows at 0.5910 (2004 and 2006 levels).
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