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  • NZD/USD fails to appreciate strong beat of NZ data amid risk-off mood.
  • New Zealand Retail Sales (Q1) jumped past downbeat forecast and previous releases.
  • Market sentiment stays sober amid tapering fears, geopolitical headlines.
  • Risk catalysts become the key amid a light calendar in Asia.

NZD/USD shrugs off New Zealand (NZ) Retail Sales, except for a quick uptick to refresh intraday high with 0.7180, while easing back towards 0.7170, down 0.10% intraday, during Monday’s Asian session. With this, the kiwi pair justifies the cautious sentiment in the markets amid challenges to the easy money policies by the global central banks, mainly due to the reflation fears.

NZ Retail Sales jumped above -4.4% forecasts and -2.7% prior to +2.5% on QoQ while also rising beyond +1.9% expected and +4.8% previous readouts to +6.8% levels on the yearly basis.

Although the data release helped push the pair towards a fresh intraday high, bulls couldn’t return amid market fears as the key economics pose challenges for the Reserve Bank of New Zealand (RBNZ) ahead of Wednesday’s monetary policy meeting.

Other than the scheduled data release, NZD/USD traders also fear the central bank actions, amid the challenges to inflation, as well as the US-China jitters and the coronavirus (COVID-19) woes to portray limited reaction to the key New Zealand data.

The US again reiterated doubts over China’s role in the global spreading of the coronavirus (COVID-19) while citing three doctors from the Wuhan Vicology lab admitted during late 2019. Further, Iran’s refrain to extend the International Atomic Energy Agency’s (IAEA) access to camera images of its nuclear sites add to the risk-off mood. Furthermore, airplane hijacking in Belarus and the coronavirus (COVID-19) woes in Asia offer an extra burden on the market sentiment.

Amid these plays, S&P 500 Futures drop 0.20% whereas commodities and Antipodeans stay on the back foot by the press time.

Looking forward, a light calendar could keep NZD/USD traders searching for the sentiment-related headlines for fresh impulse. It should, however, be noted that today’s Retail Sales pose a challenge to the RBNZ policymakers by pushing them towards the monetary policy adjustments, which in turn may test the Kiwi bulls going forward. However, it all depends upon Wednesday’s RBNZ meeting.

Technical analysis

NZD/USD forms a bearish head-and-shoulders chart pattern that needs confirmation by a downside break of 0.7140 to direct sellers, theoretically, towards the sub-0.7000 region. Meanwhile, 0.7270 and 0.7310 restrict the kiwi pair’s short-term upside.