NZD/USD remains pressured below 0.7200 ahead of NZ Retail Sales


  • NZD/USD marked two-week downtrend with Friday’s mild losses.
  • Reflation, tapering concerns returned to the table on strong PMIs and Fedspeak.
  • Today’s New Zealand Retail Sales can help forecast GDP, become the key for Wednesday’s RBNZ.

NZD/USD keeps Friday’s sober mood, heavy around 0.7170 recently, amid the early Monday morning in Asia. The kiwi pair dropped the previous day as fears of the Fed’s policy adjustments favored the US dollar to portrays a corrective pullback from early January levels.

Will strong Retail Sales trigger RBNZ moves?

Friday’s upbeat PMIs from the US added to the Federal Reserve (Fed) official’s worries and the concerns over the tapering also mount for the Reserve Bank of New Zealand (RBNZ) board members. However, today’s New Zealand (NZ) Retail Sales for the first quarter (Q1) could save Governor Adrian Orr and the company if matching the downbeat forecast of -4.4% QoQ, versus -2.7% prior, as well as +1.9% for YoY compared to +4.8% previous readouts.

Record activity jump in the US pushed Atlanta Federal Reserve President Raphael Bostic and Philadelphia Fed President Patrick Harker to join the line of Dallas Federal Reserve Bank President Robert Kaplan while citing inflation fears and the need to act. Worries surrounding the Fed action joined the slump in cryptocurrencies to weigh on Antipodeans and commodities, except for gold that benefited from safe-haven bids.

While the Fed policymakers have recently been cautious on their approach and try to defend the current status quo, a similar path could be expected for the RBNZ policymakers should today’s Retail Sales offer a positive surprise. Though, RBNZ Governor Orr may wait for the Fed and cite recently mixed data at home to defend the New Zealand central bank’s inaction.

Other than Retail Sales, New Zealand’s recent jitters with China, due to joining the lines of the UK and the US, as well as the recently witnessed airplane hijacking in Belarus, may also negatively affect the market sentiment.

Alternatively, Auckland’s lead to tame the coronavirus (COVID-19) seem to safeguard the NZD/USD bulls.

Amid these plays, Wall Street closed mixed on Friday and the US Treasury yields were also sluggish.

Looking forward, NZD/USD traders will keep their eyes on today’s NZ Retail Sales (Q1) for immediate direction. However, major attention will be given to 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.

Additional important levels

Overview
Today last price 0.7179
Today Daily Change -0.0001
Today Daily Change % -0.01%
Today daily open 0.718
 
Trends
Daily SMA20 0.7216
Daily SMA50 0.7141
Daily SMA100 0.7179
Daily SMA200 0.6986
 
Levels
Previous Daily High 0.7223
Previous Daily Low 0.7153
Previous Weekly High 0.7272
Previous Weekly Low 0.7151
Previous Monthly High 0.7287
Previous Monthly Low 0.6945
Daily Fibonacci 38.2% 0.718
Daily Fibonacci 61.8% 0.7196
Daily Pivot Point S1 0.7148
Daily Pivot Point S2 0.7115
Daily Pivot Point S3 0.7078
Daily Pivot Point R1 0.7218
Daily Pivot Point R2 0.7255
Daily Pivot Point R3 0.7288

 

 

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