Key Highlights

  • The New Zealand Dollar is in a strong downtrend below 0.6600 against the US Dollar.
  • A major bearish trend line is forming with resistance at 0.6580 on the 4-hours chart of NZD/USD.
  • The US Retail Sales in April 2019 declined 0.2% (MoM), whereas the forecast was +0.2%.
  • The US Initial Jobless Claims for the week ending May 11, 2019 may slide from 228K to 220K.

NZDUSD Technical Analysis

Earlier this month, the New Zealand Dollar started a strong decline below 0.6600 against the US Dollar. The NZD/USD pair recovered recently, but upsides were capped by the 0.6600-0.6610 resistance.

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Looking at the 4-hours chart, the pair traded as low as 0.6525 and recently corrected above 0.6550 and 0.6580. However, the pair struggled to hold gains above 0.6600 and stayed well below the 100 simple moving average (4-hours, red).

A swing high was formed at 0.6614 and the pair started a fresh decline below 0.6580 plus the 50% Fib retracement level of the recovery from 0.6525 to 0.6614.

The pair is clearly under pressure and if there is a close below the 0.6540 support, there could be a downside extension below the 0.6525 swing low. The next key supports are 0.6500 and 0.6485.

On the upside, there is a major bearish trend line forming with resistance at 0.6580 on the same chart. Besides, the pair must settle above the 0.6600 resistance to start a strong rebound towards 0.6640 and 0.6650 in the near term.

Fundamentally, the US Retail Sales figure for April 2019 was released by the US Census Bureau. The market forecast was a 0.2% rise in sales in April 2019, compared with the previous month.

The actual result was disappointing, as there was a 0.2% decline in sales. On the other hand, the last reading was revised up from 1.6% to 1.7%. Looking at the Retail Sales ex Autos, there was a 0.1% rise, less than the +0.7% forecast.

The report added:

Total sales for the February 2019 through April 2019 period were up 3.0 percent (±0.7 percent) from the same period a year ago. The February 2019 to March 2019 percent change was revised from up 1.6 percent (±0.5 percent) to up 1.7 percent (±0.2 percent).

Overall, as long as NZD/USD is below 0.6600, there is a risk of more losses. Looking at GBP/USD, there was a sharp decline below the 1.2950 and 1.2900 supports. EUR/USD also struggled and traded below the 1.1215 support.

Economic Releases to Watch Today

  • US Housing Starts April 2019 (MoM) – Forecast 1.205M, versus 1.139M previous.
  • US Building Permits April 2019 (MoM) – Forecast 1.298M, versus 1.288M previous.
  • US Initial Jobless Claims – Forecast 220K, versus 228K previous.



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