The NZD/USD price retreated slightly even after the latest American consumer inflation and strong New Zealand retail sales numbers. The pair is trading at 0.6650, which is about 1.10% below the highest level this week.
New Zealand retail sales data
Statistics New Zealand published the latest retail sales numbers from the country on Friday. The numbers showed that the country’s electronic sales rose from 0.3% in December to 3.0% in January. As a result, the country’s sales rose from 4.2% to 5.7% in January.
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The performance was attributed to the ongoing reopening even as the number of Covid-19 cases keep rising. The government confirmed more than 300 new cases on Thursday, the highest number since the pandemic started.
New Zealand has recorded only 53 deaths so far, meaning that it has done better than most countries. At the same time, the government has made plans to end quarantine measures and start to reopen its borders. Just this week, the Australian government announced that it will reopen its borders.
The NZD/USD pair is retreating as investors reflect on the latest American inflation data published on Friday. The numbers revealed that the headline consumer inflation rose to 7.3% in January while core CPI jumped to 6.0%.
Therefore, the pair’s price action is likely because of fears of convergence of the Reserve Bank of New Zealand (RBNZ) and the Federal Reserve. The two banks have signaled that they will accelerate their tightening this year.
NZD/USD forecast
The four-hour chart shows that the NZD/USD pair has been in a strong bearish trend in the past two days. The pair has dropped to the 25-day and 50-day moving averages. It has also moved slightly below the 38.2% Fibonacci retracement level. At the same time, the Relative Strength Index (RSI) has been in a downward trend.
The pair has also formed an ascending channel shown in red. Therefore, a move below the lower side of the channel will mean that bears have prevailed. As a result, that will lead to the possibility of the pair dropping to the key support at 0.6600.
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Source: https://invezz.com/news/2022/02/11/nzd-usd-forecast-as-new-zealand-retail-sales-jump/