New Zealand Dollar weakens mildly today despite much stronger than expected retail sales data. While RBNZ rate decision is a focus this week, it’s unlikely to provide any market moving surprises. Kiwi is currently just following broad market developments.
NZD/JPY edged higher to 79.40 earlier this month, but quickly retreated. There is no confirmation of bearish reversal yet. But upside momentum was clearly diminishing as seen in both 4 hour and daily MACD. Sustained break of 77.68 support will also have 55 day EMA firmly taken out. That would argue that NZD/JPY is already in correction to, at least, the rise from 68.86. Deeper decline could be seen back to 75.61 support and possibly below. Nevertheless, rebound from current level would retail near term bullishness for another high above 79.40 first.
NZD/USD weakened after hitting 0.7304. Sustained break of 0.7114 support will also have 55 day EMA firmly taken out. That would suggest that recovery from 0.6942 has completed. Corrective pattern form 0.7463 should have then started the third leg. Deeper fall could then be seen through 0.6942 support to 0.6797 resistance turned support and below, to correct whole up trend from 0.5469. Nevertheless, strong rebound from current level, followed by break of 0.7304, will bring retest of 0.7463 high next.
