Reversal Pattern in USD to NZD Rate after Fall in NZ Retail Sales
The USD to NZD continues to display volatility after a 3-cent round trip down in July and up in August, which might be over now. There is still room for buyers until 0.6220 in NZD/USD, which is the highest level for 2024, but the 200 daily SMA is a major hurdle and we’re seeing a bearish reversing pattern on this timeframe chart. This forex pair was showing resilience despite the surprise RBNZ 25 bps rate cut, however this bullish run has been on the back of the recent USD weakness.
NZD/USD Chart Daily – The 200 SMA Acting As Resistance Again
NZD/USD dipped to 0.5850 at the end of July after the 300 pips decline, and then sellers retested to this level which held for a second time, and the price made a big retrace higher that day. That was a signal for a bullish trade in this forex pair, which turned out to be a straightforward move.
But buyers are having trouble at the 200 daily SMA (purple) which has been acting as resistance twice before this year. On Wednesday the price formed a doji candlestick which is a bearish reversing signal after the climb and yesterday followed with a bearish candlestick. On the other hand, we were seeing some green signs from the New Zealand economy, with the BNZ-BusinessNZ Performance of Services Index (PSI) for July rose to 44.6 points, up from a revised 40.7 points in June. This indicates that the decline in the services sector has moderated. Early this morning we got the Q2 Retail Sales report from New Zealand.
New Zealand Q2 Retail Sales Report
- Quarterly Retail Sales: Decreased by 1.2% q/q, worse than the expected -1.0%; Q1 saw a rise of 0.5%.
- Annual Retail Sales: Fell by 3.6% y/y, compared to a prior decline of 2.4% y/y.
- Core Sales: Dropped by 1.0% q/q, below the expected -0.8%; prior was a 0.4% increase.
Key Insights from Stats NZ:
- 11 out of 15 industries saw lower seasonally adjusted sales volumes in Q2 compared to Q1.
- 11 out of 15 industries experienced lower seasonally adjusted sales values in Q2 compared to Q1.
- 14 out of 16 regions reported lower seasonally adjusted sales values in Q2 compared to Q1.
NZD/USD Live Chart
