NZD/USD usually trades in narrow ranges and is mostly affected by the greenback’s news. This time, local retail sales were really bad and sent the kiwi down – no rate hike coming soon…
Retail sales in New Zealand were bad – they dropped by 0.6%, much worse than early expectations for a rise of 0.2%. Also last month’s figure was revised to the downside to 0.7%. Core retail sales disappointed as well with a drop of 0.9 – early predictions saw a rise of 0.3%. This had its toll on NZD/USD:
Both figures, that touch consumers directly show that the public in New Zealand is still skeptic and cautious. These drops in consuming mean less inflation, and no need for a rate hike. Canada could precede New Zealand with a rate hike. New Zealand will not follow Australia so fast.
NZD/USD, usually a cautious currency pair, made a move – it fell from 0.7140 to 0.7085 and continues dropping. This comes during the Sydney session, when there aren’t many traders out there. When the Tokyo session begins, the fall could be stronger.
NZD/USD technical analysis
The kiwi is supported by the 0.70 line, which is a round number and also served as a support line not long ago. The next support line is quite strong – 0.68 stopped the pair from dropping lower during February. The last time that it was weaker was in September, more than 7 months ago.
If the US dollar weakens significantly, NZD/USD can test a strong resistance line at 0.72, a line it didn’t breach since mid-January.
By the way, I haven’t written an NZD/USD weekly forecast in quite some time. Is there interest in this pair?
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