- Pessimism at home and largest trading partner weigh on sentiment.
- Quarterly retail sales data could offer fresh impulse.
Having witnessing sluggish GDT data and a disappointment from its largest trading partner, NZD/USD is taking rounds near 0.6500 at the start of Wednesday’s Asian session.
Despite the US Commerce Department’s temporary relief to China’s Huawei supporting the risk sentiment on Tuesday, the Kiwi pair couldn’t benefit soft credit card spending at home signaled soft retail sales print, up for release in next few hours.
Adding to the weakness was Reserve bank of Australia’s (RBA) meeting minutes that sound mostly dovish while comments from the RBA Governor that emphasized the need of June rate cut.
Australia is the largest customer to New Zealand, any challenges to the Aussie can be well received by the Kiwi as well.
Recently the bi-monthly release of GDT price index slipped to -1.2% from +0.4% prior whereas prices of whole mild power (WMP) dropped for a fourth consecutive month to -2.1%.
Traders now look forward to the first quarter (Q1) 2019 retail sales data for fresh impulse. The forecast suggests 0.0% against +1.7% prior on a quarterly basis while retail sales ex-autos, also known as core retail sales, may grow +0.9% from 2.0%.
The Kiwi is yet to provide a sustained break of 0.6500, which in turn could drag the quote to October 2018 low near 0.6425, until then chances of the oversold levels of 14-day relative strength index (RSI) to trigger the prices rise to eight-week-old descending trend-line at 0.6555 and 0.6580 can’t be denied.