- Kiwi bids higher in Asia before settling back, but still strong on the day.
- Kiwi GDP figures to impact the pair following US Retail Sales.
The NZD/USD took a ride in the early Asia session to 0.7353 before settling back into the 0.7340 area. The Kiwi is the winner in Wednesday’s early market session despite risk aversion tugging at major currencies following Trump’s firing of his own hand-picked Secretary of State, Rex Tillerson, late Tuesday followed by headlines stating that Trump is going further down the trade war rabbit hole and will be seeking an additional $60B in tariffs and restrictions aimed at China.
The macro calendar for the week is on the thin side, but Wednesday will be seeing New Zealand’s GDP figures at 21:45 GMT; market forecasts have the year-on-year figure coming out at 3.1% versus the previous 2.7%, and the quarterly number is anticipated at 0.7% versus the previous 0.6%. The economic outlook for New Zealand is still lagging behind global trends but remains on the sunny side regardless. The new head of the Reserve Bank of New Zealand (RBNZ) will be taking up the post at the end of the month, and it is unlikely that the RBNZ will be making any changes to policy targets with a change of the guard so close at hand. Despite this, any good macro news will be welcomed by Kiwi bulls who have been looking for a reason to start bidding up the NZD.
Before NZ GDP will be the US’ Retail Sales figures at 12:30 GMT and the headline month-on-month core Retail Sales figure for February is expected to come in at 0.4% versus the previous 0.0%. Inflation fears continue to nag at equity markets and risk-based assets, so too much good news in the shape of clean beats for forecasts could bring risk aversion roaring back in the face of upbeat economic figures.
The pair is trying for a fourth consecutive day with a bullish close but is still facing pressure from a recent double top on Daily candles. H4 charts are leaning heavily into the bullish camp, and a correction from here will need to hold above the 0.7290 level to give another round of buying a fair shot of pushing higher. Support is currently sitting at the last two swing lows of 0.7285 and 0.7245 respectively, with resistance at late February peaks of 0.7385 and the double-top boundary of 0.7435.