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  • Kiwi chips higher on trade hopes, but waivers as Retail Sales slump.
  • Asia markets come out of the weekend getting mixed signals from the US-China trade conflict.

The NZD/USD lifted  to kick off the week’s trading, but is falling away again, testing into the 69.00 major level.

Asia session markets kicked things off with a mild hop as headlines of a possible simmering down of trade tensions between the US and China took the edge off of market tensions, but conflicting statements from the US’ Lighthizer are sending markets back onto the cautious side.

New Zealand Retail Sales figures also missed the mark, with quarterly Retail Sales for 2018’s Q1 came in notably soft, printing at a dismal 0.1%, far below the previous reading of 1.7%; year-on-year Visitor Arrivals also contracted by -9% in April, largely eating away at the previous period’s 13%.

With the New Zealand economy’s growth continuing to slump, the Reserve Bank of New Zealand (RBNZ) is just as likely to engage in an interest rate cut instead of a hike if growth continues to lag. The RBNZ is also widely expected to not see a rate hike until 2020 by some estimates, and the NZD has struggled to develop a meaningful correction against the USD after declining from April’s high of 0.7395.

NZD/USD levels to watch

A technical bottom may have formed on the NZD/USD from 0.6850, and the pair’s 7% decline from April’s peak could see a recovery to the 38.2 Fibo level at 0.7060, though the pair will first have to surmount the last swing high at 0.6980, which coincides with the 23.6 Fibo retracement level.