New Zealand dollar rises after strong Q3 retail sales

Cryptocurrencies rallied during the weekend as interest in alternative assets continued to rise. The price of Bitcoin rose to a high of $18,950 while Ethereum and Ripple rose to $580 and $0.45 respectively. This strong performance makes these digital currencies the best performing asset class this year. Year-to-date, Bitcoin has risen by 148% while ETH has risen by more than 262%. Low interest rates, institutional ownership, fears of high inflation, and rising risks because of the virus have played a role in influencing the prices of these digital assets. 

The New Zealand dollar started the week on a high note as the market reflected on the overall weaker US dollar and better retail sales numbers. The greenback is down by 0.15% today mostly because of hopes of a Covid vaccine. On Friday, Moderna and Pfizer announced that they had applied for emergency authorisation of their vaccine. Data from the New Zealand Statistics Bureau showed that retail sales rose by 28% in the third quarter, a sharp increase from Q2’s decline of 14.6%. The sales rose by 8.2% after falling by 14.2% in the same quarter in 2019. 

Later today, the focus will be on global flash manufacturing and services PMIs from Markit. With most countries reportedly being in another wave of the virus, analysts expect that the numbers will show a slight weakness. For example, in the European Union, the expectation is that the services PMI will fall from 46.9 to 42.5 while the manufacturing PMI will fall from 54.8 to 53.1. From the UK, analysts expect the services and manufacturing PMI will drop to 50 and 52.1, respectively. Other important numbers to watch out for today are US PMIs and Mexico’s first half month CPI.

NZD/USD

The NZD/USD price is up sharply today and is trading at 0.6954, which is the highest it has been since December 2018. The pair has made substantial gains from its year-to-date low of 0.5463. On the daily chart, the price is above all moving averages, which is a sign that bulls are in control. Also, it is above the resistance level at 0.6797, where it had formed a double top pattern. Therefore, since bulls have the momentum, the pair will likely continue rising as they aim for the next level at 0.7000.

EUR/USD

The EUR/USD pair is little changed today ahead of the important flash manufacturing PMI numbers. It is trading at 1.1873, which is slightly below last week’s high of 1.1892. On the four-hour chart, the price is a few pips above the 25-day and 15-day exponential moving averages while the Average True Range (ATR) has continued to fall. It is also slightly above the ascending trendline that is shown in white. Therefore, the pair is likely to continue rising, with the initial target being at 1.1900.

ETH/USD

Ethereum soared to a high of $580 today. It has given-up some of those gains but is currently trading at $561. On the daily chart, the ETH/USD price has been on a strong upward trend and is also above the short and medium-term moving averages while the RSI has moved to the overbought level of 70. Therefore, the pair is likely to continue rising as bulls aim for the next resistance at $600.