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(DAILY NOTION) NZD/USD Possible Fall Below Level of 0.700. Next Mover: PMI Data & Retail Sales Number

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(DAILY NOTION) NZD/USD Possible Fall Below Level of 0.700. Next Mover: PMI Data & Retail Sales Number

Illustration photo of NZD/USD daily chart from Tradingview

The NZD/USD is struggling today after relatively mixed economic data from New Zealand. The NZDUSD is trading at 0.7193, which is a few pips below its year-to-date high of 0.7317.

In a report earlier today, the New Zealand bureau of statistics said that the country’s headline consumer price rose by an annualized rate of 1.4% in the fourth quarter. That was better than the expected increase of 1.0%. On a quarter-on-quarter basis, the CPI rose by 0.5%, lower than the previous increase of 0.7%.

The NZD/USD possibly declined because of the weak PMI data released by Business NZ. The number showed that the PMI fell from the expansionary zone of 55.3 in December to 48.7. A PMI number of 50 and below is usually a sign of contraction. Nonetheless, the New Zealand economy is in a relatively strong shape judging by the recent electronic retail sales number.

The NZD/USD pair has been on a strong upward trend in the past few months as shown on the daily chart below. It is also above the 25-day and 15-day exponential moving average. Most importantly, the pair has been forming a rising wedge pattern. Also, the Relative Strength Index (RSI) has formed a bearish divergence pattern. 

Therefore, while the uptrend could go on for a few weeks, there is a possibility that it will resume a new downtrend. If this happens, the next level to watch will be the psychological level of 0.700.

FOLLOWME NZD/USD Overall Sentiment (As of 03:30 p.m., Jan 22, 2021),

Short - 49.56%

Long - 50.44%

For information please refer to Crispus Nyaga.

Disclaimer: The content above represents only the views of the author or guest. It does not represent any views or positions of FOLLOWME and does not mean that FOLLOWME agrees with its statement or description, nor does it constitute any investment advice. For all actions taken by visitors based on information provided by the FOLLOWME community, the community does not assume any form of liability unless otherwise expressly promised in writing.

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