NZD/USD: On the back foot around multi-year low with eyes on New Zealand retail sales
- Kiwi seesaws near multi-year low amid fears of a global economic slowdown.
- New Zealand Q2 Retail Sales will be in the spotlight for now while major market attention holds on to updates from Jackson Hole Symposium.
Having plummeted to fresh low since January 2016, NZD/USD takes the rounds to 0.6366 at the start of Friday’s Asian trading session.
On Thursday, sluggish Manufacturing Purchasing Managers’ Index (PMI) from major economies renewed fears of the upcoming recession and pushed markets off commodity-linked currencies.
The Kiwi was already trading near the yearly low and hence a technical breakdown also contributed towards making it the worst performer among the G10 currencies.
Also adding to the pair’s weakness is continued uncertainty surrounding the US-China trade deal as the US President Donald Trump keeps shifting from his words on the developments while there are no clear-cut statements from China. Recently, the White House Adviser Larry Kudlow said that there was a productive trade discussion (via a call) between the US and Chinese diplomats on Wednesday and he is still planning for Chinese team to come to the US in September.
Additionally, latest comments from the regional Fed leaders, namely Esther George and Patrick Harker, have been upbeat and strengthen the US Dollar (USD), offering extra weakness to the pair.
Moving on, New Zealand’s second-quarter (Q2) Retail Sales will gain trader’s immediate attention whereas broad market concerns will keep sticking on to what the global central bankers speak at the Jackson Hole Symposium over the weekend.
The Retail Sales and Retail Sales ex-Autos both previously rose 0.7% and might weaken further considering the latest slew of downbeat data points, which in turn can drag the Kiwi further to south. However, a surprise increase will be capable of reversing a major chunk of latest losses.
Technical Analysis
While January 2016 low of 0.6348 becomes the immediate support to watch, additional declines might not hesitate to visit September 2015 low surrounding 0.6235. On the upside, pullback beyond August 07 low of 0.6377 can propel prices to October 2018 low near 0.6424 but the further increase is less likely unless rising past-June low of 0.6487.