Currently, NZD/USD is trading at 0.7229, up 0.03% on the day, having posted a daily high at 0.7245 and low at 0.7206.
NZD/USD has been trading in a narrow range as we come towards the close for the week where the bird has been battling against the downtrend from 0.7370 territory. We are looking at a neutral outlook for the rest of the session while lacking catalysts until NZ comes on line with some key data points. First of all, investors have been backing the bird this year so far for the most part based upon the economy's strength and a rise in dairy prices.
However, these forces are subservient to the US dollar’s trend that has turned around of late, knocking the wind out of the bird's wings as we progress through the first quarter of the year. So, today's business conditions and retail sales will be especially key and retail sales are an important puzzle piece to Q4 GDP as it accounts for 60% of private consumption, as explained by analysts at TD Securities.
NZD/USD levels 1-3 month:
"The month ahead could see NZD/USD extending beyond 0.7500 (Sep high) if the US dollar continues to register disappointment in the Trump Administration’s policies. Further ahead, though, the Fed’s tightening cycle plus US fiscal expansion should maintain upside pressure on US interest rates and the US dollar, pushing NZD/USD lower to 0.7000."
NZD/USD is stuck between the 200 sma on the 4-hourly time frame after breaking the recent s rising channel's resistance until meeting the 4hr 50 smoothed ma. A break of 0.7237 and 13th Dec highs opens a case for a full recovery back to the 2017 highs a 0.7374. To the downside, the 50-d sma is located at 0.7117.