The NZD/USD is still under pressure even after the positive economic data from New Zealand. The NZDUSD is trading at 0.7130, which is 2.50% below the year-to-date high of 0.7295.
What happened: The New Zealand statistics bureau released the December retail sales numbers earlier today. The numbers showed that the electronic sales rose by 19.50% in December leading to an annual increase of 3.5%. The numbers were better than the previous month’s increase of 0.1% and 1.4%.
Further data from New Zealand showed that business confidence declined by 6% in December while capacity utilisation increased to 95.1%. The two were better than the previous decline of 40% and increase of 92.6%.
These numbers are early signs that the New Zealand economy is on a recovery path. The only main issue is that the coronavirus pandemic has made it difficult for the country’s tourism and hospitality sector.
NZD/USD technical analysis
On the daily chart we see that the NZD/USD pair has been in a steady downward trend in the past few days. This has seen it move below the 15-day and 25-day exponential moving averages. This is a sign that the rally has lost momentum.
In fact, the momentum indicator has moved below zero. Therefore, in the near future, I suspect that the NZDUSD will continue falling as bears target the next support at 0.700. The invalidation of this trend will be at 0.7200.
NZDUSD technical chart