NZDUSD
The NZD/USD is still under pressure even after the positive economic data from New Zealand. The NZDUSD is trading at 0.7130, which is 2.50% below the year-to-date high of 0.7295.
What happened: The New Zealand statistics bureau released the December retail sales numbers earlier today. The numbers showed that the electronic sales rose by 19.50% in December leading to an annual increase of 3.5%. The numbers were better than the previous month’s increase of 0.1% and 1.4%.
Further data from New Zealand showed that business confidence declined by 6% in December while capacity utilisation increased to 95.1%. The two were better than the previous decline of 40% and increase of 92.6%.
These numbers are early signs that the New Zealand economy is on a recovery path. The only main issue is that the coronavirus pandemic has made it difficult for the country’s tourism and hospitality sector.
On the daily chart we see that the NZD/USD pair has been in a steady downward trend in the past few days. This has seen it move below the 15-day and 25-day exponential moving averages. This is a sign that the rally has lost momentum.
In fact, the momentum indicator has moved below zero. Therefore, in the near future, I suspect that the NZDUSD will continue falling as bears target the next support at 0.700. The invalidation of this trend will be at 0.7200.
