Home NZD/USD: RBNZ / US CPI comeback faltering below key 200-M SMA (0.6980)
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NZD/USD: RBNZ / US CPI comeback faltering below key 200-M SMA (0.6980)

  • NZD/USD: time for some consolidation before week unfolds new catalysts.
  • NZD/USD: US dollar softness allows the bird to take flight, but 200-M SMA a tough one.

NZD/USD is currently trading at 0.6960, consolidating the recovery from 0.6902 lows of last week’s trade post-RBNZ’s dovish hold.  

NZD/USD has managed a recovery of last week’s RBNZ fuelled lows in the wake of a softer dollar and less angst over yield spreads/inflationary pressures that have given the higher beta traders some fat to chew on again. NZD/USD rallied from 0.6926 on the US CPI data miss on Thursday and notched a new short-term  high to 0.6986 on risk-on Friday.

“While we still retain a downside bias for kiwi, the move lower to date has been significant and some near-term momentum indicators are looking a little oversold. Some consolidation is now likely,” analysts at ANZ explained.

Key drivers for the week ahead

The week ahead: all eyes on US retail sales  – Nomura

For the week ahead, the US retails sales will be a key driver while elsewhere, traders will be keeping a close eye on geopolitical and trade developments.  

“On the  US-China trade front, rhetoric continues to soften, with Trump telling the Commerce Commission to get Chinese telecommunications manufacturing firm ZTE back in business,”  analusys  at ANZ explained, adding, “On the other hand, Middle East tensions remain at the fore, with Trump to go ahead on Monday with plans to set up an embassy in Jerusalem. And on Sunday, OPEC president Suhail Al Mazrouei said that OPEC members have an adequate “buffer” of potential supply to cushion oil markets if the  US  re-imposes sanction on Iran.””

NZD/USD levels

 

Support comes in at 0.6880 and resistance at 0.7080. The  NZD/USD  had dropped below the key 200-month moving average support at 0.6980 and technicals stay bearish while RSIs are biased to the downside longer-term on the daily and weekly sticks.

 

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