NZD/USD breaks below 0.7100 as market sentiment takes a U-turn

NZD/USD reaches a weekly low at 0.7082, amid a sudden switch on market sentiment.
The greenback shrug-off of its losses is up against most G8 currencies.
New Zealand GDP is expected to come at 16.3% later this week.
US Retail Sales and Initial Jobless Claims could weigh on the US dollar.

Christian Borjon Valencia FXStreet

The NZD/USD advanced earlier in the day but it has since retreated the gains and some more. The pair is trading at 0.7096, losing 0.30%, having reached a weekly low before the New York session close.

The market sentiment suddenly switched towards a risk-off mode. Before the US stock market opened, the Bureau of Labor Statistics released inflation figures for the US. The Core Consumer Price Index rose by 4% versus 4.3% foreseen by economists, slowing down for the first time in six months. After the release, the US stock indexes rose, the greenback sold off across the board, while the US 10-year yield plummeted below 1.30%.

At the time of writing, the US Dollar Index is gaining 0.04%, up to 92.65, and is exerting pressure on the NZD/USD pair and most G8 currencies, except for the safe-haven currencies like the Japanese yen and the Swiss franc.

New Zealand GDP and US Retail Sales would be decisive catalysts of the NZD/USD

Moving back to the NZD/USD, the New Zealand economic docket did not have high impact data on Tuesday. Later on the week, on Thursday’s Asian session, the country’s GDP for the second quarter will be released, and is expected to come at 16.3% on an annual basis.

Concerning the US, Retail Sales data and Initial Jobless Claims will be essential for the greenback. Good readings on Thursday could boost the US dollar and resume the NZD/USD recent downtrend. Nevertheless, poor data coupled with softer inflation numbers could weigh on the greenback, pushing the NZD/USD pair up to challenge 0.7100.

KEY TECHNICAL LEVELS TO WATCH

NZD/USD

Overview
Today last price	0.7096
Today Daily Change	-0.0023
Today Daily Change %	-0.32
Today daily open	0.7119

Trends
Daily SMA20	0.7015
Daily SMA50	0.7002
Daily SMA100	0.708
Daily SMA200	0.7117

Levels
Previous Daily High	0.7126
Previous Daily Low	0.7097
Previous Weekly High	0.7162
Previous Weekly Low	0.7076
Previous Monthly High	0.7089
Previous Monthly Low	0.6805
Daily Fibonacci 38.2%	0.7115
Daily Fibonacci 61.8%	0.7108
Daily Pivot Point S1	0.7102
Daily Pivot Point S2	0.7085
Daily Pivot Point S3	0.7074
Daily Pivot Point R1	0.7131
Daily Pivot Point R2	0.7143
Daily Pivot Point R3	0.7159

Author

Christian Borjon Valencia

FXStreet

Markets analyst, news editor, and trading instructor with over 14 years of experience across FX, commodities, US equity indices, and global macro markets.

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