- The New Zealand Dollar corrected towards 0.7200 against the US Dollar where it found sellers.
- A connecting bearish trend line with current resistance at 0.7160 on the 4-hours chart of NZD/USD is preventing an upside break.
- The US Building Permits in Sep 2017 posted a 4.5% decline, compared with the -2.9% forecast.
- Today in the US, the Initial Jobless Claims for the week ending Oct 14, 2017 will be released, which is forecasted to decline from 243K to 240K.
NZDUSD Technical Analysis
The New Zealand Dollar after forming a base above 0.7050 against the US Dollar started a correction. The NZD/USD pair traded above 0.7150, but upside remains capped by 0.7200.
During the upside move, the pair was able to break a bearish trend line at 0.7115 on the 4-hours chart. It also succeeded in moving past the 50% Fib retracement level of the last decline from the 0.7243 high to 0.7059 low.
However, the upside move was capped by the 100 simple moving average near 0.7185 (4-hour, red) and 0.7200. Moreover, there is a connecting bearish trend line with current resistance at 0.7160 on the same chart, acting as a barrier for more gains.
Overall, it seems like the pair might continue to struggle near 0.7180-0.7200 and will most likely resume its downtrend.
US Building Permits and Housing Starts
Recently in the US, the Building Permits and Housing Starts report for Sep 2017 was released by the US Census Bureau, at the Department of Commerce. The forecast was slated for a 2.9% decline in the Building Permits compared with the previous month.
The actual result was lower than the forecast, as there was a decline of 4.5% in Building Permits. Looking at the Housing Starts, there was a decline of 4.7%, compared with the -0.5% forecast.
The report stated:
Privately-owned housing units authorized by building permits in September were at a seasonally adjusted annual rate of 1,215,000. This is 4.5 percent (±1.6 percent) below the revised August rate of 1,272,000 and is 4.3 percent (±1.7 percent) below the September 2016 rate of 1,270,000. Single-family authorizations in September were at a rate of 819,000; this is 2.4 percent (±1.7 percent) above the revised August figure of 800,000.
The NZD/USD pair might correct a few pips in the short term, but upsides should be limited by 0.7180-0.7200.
Economic Releases to Watch Today
- UK Retail Sales for Sep 2017 (YoY) – Forecast +2.1%, versus +2.4% previous.
- UK Retail Sales for Sep 2017 (MoM) – Forecast -0.1%, versus +1.0% previous.
- UK Retail Sales ex-fuel for Sep 2017 (YoY) – Forecast +2.4% versus +2.8% previous.
- US Initial Jobless Claims – Forecast 240K, versus 243K previous.