NZD/USD: Bulls and bears jostle around 0.7000 even as NZ Consumer Confidence eases

NZD/USD treads water around 0.7000, currently near 0.7005, amid the initial hour of Friday’s Asian trading. The absence of US traders, due to Thanksgiving Day, restricts the pair’s performance to the extent that the recently released consumer sentiment data also failed to impress the kiwi traders. It’s worth mentioning that the challenges to risks have gradually firmed up and hence bulls are turning cautious.

New Zealand’s ANZ- Roy Morgan Consumer Confidence came in as 106.9 in November versus 108.7 previous reading. Details from the Australia and New Zealand Banking Group (ANZ) suggest that the key retail spending indicator in the survey is still very weak, suggesting the sharp overshoot higher in retail sales seen in the third quarter is likely to fade relatively quickly.

Global markets are yet to overcome the US holiday hangover as macros are mostly dead amid a light calendar. The latest catalysts suggest AstraZeneca’s plans for another vaccine test, which could slow down the vaccine hopes.

Also fears that the US-China tussle is likely to renew as failures to perform on the trade deal as well as fresh American sanctions due to Chinese companies’ likely linkages with Iran missile program occupied news headlines earlier. Also on the negative side are the fears of no-deal Brexit.

Against this backdrop, ANZ says, “New Zealand’s relatively sparse population and geographic isolation has proven a huge advantage in this crisis, and presents an opportunity to rebrand our tourism sector towards a higher-value, more exclusive, experience. But there are many hurdles to overcome before that can happen. It’s going to be a bumpy ride.”

Technical analysis

The mid-2018 top surrounding 0.7050 holds the key to the pair’s further upside.