NZD/USD: Trading the New Zealand Retail November 2013

New  Zealand  Retail Sales is considered one of the most important indicator of consumer spending. The indicator’s release in the first week of each month provides analysts and traders with  an early  look at consumer spending. A reading that is higher than the market forecast is bearish for the US dollar.

Here are all the details, and 5 possible outcomes for NZD/USD.

Published on Wednesday at  21:45 GMT.

 Indicator Background

Consumer spending is one of the most important components of the economy, and strong numbers in this sector signify growth and a stronger economy.

The February reading of -0.1% was a disappointment, falling short of the market expectations of a 0.2% rise. Also, it was the first time the indicator dipped into negative territory since August 2011. The forecast for  March calls for a  respectable 0.3% rise.

Sentiments and levels

New Zealand releases started the week in fine form, with an excellent jobs report last week. Employment Change improved nicely and the Unemployment Rate fell. Over in the US, speculation of QE tapering in the US is on the rise once again, after a surprisingly strong Non-Farm Payrolls report. So, the overall sentiment is neutral on NZD/USD towards this release.

Technical levels, from top to bottom: 0.8435, 0.8360, 0.8270, 0.8225, 0.8160 and 0.81.

5 Scenarios

1. Within expectations: 0.7% to 1.1%: In such a case, the New Zealand dollar is likely to rise within range, with a small chance of breaking higher.
2. Above expectations: 1.2% to 1.6%: An unexpected higher reading can send NZD/USD well above one resistance line.
3. Well above expectations: Above 1.7%: Such an outcome would propel the pair upwards, and a second resistance line might be broken as a result.
4. Below expectations: 0.2% to 0.6%: A negative reading could push NZD/USD below one level of support.
5. Well below expectations: Below 0.2%: In this scenario, the kiwi could break a second support level.

For more about the kiwi, see the  NZD to USD forecast.

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