- NZD/USD lower despite upside retail sales beat.
- Kiwi caught in a bearish spiral as economy muddles.
NZD/USD is softening in Tokyo trading, currently testing around 0.7310 as of writing.
Market sentiment was the main driver for movement heading into the Friday session, and with little data out this week for the Kiwi risk sentiment is weighing the currency down heavily even as a reversal in market-wide Dollar buying on Thursday couldn’t keep NZD/USD buoyed for long.
Retail Sales earlier today had little impact on the pair, despite the headline figure coming in at 1.7%, above the forecast 1.4% and far outpacing the previous figure of 0.3%. Economic data for New Zealand has been mixed lately, and with NZ’s economy expected to remain tied to Australia and lag behind global trends, intrinsic weakness in the Kiwi is likely to remain a key factor as risk aversion sent the Greenback soaring and plummeting on the back of skittish bond yields.
The Reserve Bank of New Zealand (RBNZ) has a new governor taking the helm effective March. Adrian Orr will be heading up NZ’s central bank and is widely expected to keep the keel even and maintain the previous governor various policies and targets. Governor Orr held the title at the RBNZ for several years before departing to take part in the New Zealand Super Fund in 2007.
The pair is declining from a soft double-top forming near the 74.00 handle, and the recent turnaround sees the price approaching the 34 EMA at 0.7275. NZD/USD has been caught in a messy lateral channel since the 3rd quarter of 2016, and the pair looks set to continue to the lower bound if the turnaround from 0.7400 holds. Support is currently waiting at 0.7290 and 0.7256, while resistance builds at 0.7372 and 0.7427.