- The NZD / USD maintains recovery movements of 0.6105 after New Zealand’s quarterly retail sales (NZ).
- The tone of the risk remains slow in the midst of the American-Chinese fights, of virus woes.
- Yuong Ha of the RBNZ said he plans to keep the OCR at the current level until March 2021.
- A light schedule will keep the focus on trade / virus updates for a new boost.
The NZD / USD is paying close attention to Q1 retail sales in New Zealand while extending recovery movements to 0.6125, despite mixed data, during the first Asian session on Friday.
New Zealand’s first quarter (Q1) retail sales data gave mixed signals. While overall retail sales fell 0.7% QoQ compared to + 0.7% previously, retail sales ex-Autos gained 0.6% compared to 0.5% in previous surveys.
Given the data survey period which included only a slight lock, traders did not react to the economy despite being the main economy.
That said, the pair fell on Thursday as the fight between the United States and China intensified after Chinese diplomats were ready to harshly safeguard their interests. This could be viewed as an indirect warning to the United States, as the Trump administration showed its intention, earlier in May, to keep Hong Kong free. In addition, US allegations about the dragon nation for the virus epidemic and the discomfort of the trade deal also place the world’s largest economy on the radar of the Asian major.
The pair also put downward pressure on the recovery of the US dollar from the 14-day low. The greenback won in all areas the day before amid low risk and better than expected activity data. To support the US currency, Fed policy makers have attempted to cut negative rates.
It should also be noted that the increase in the number of virus cases in the world, as well as an increase in the number of people from the southern United States, does not prevent US President Donald Trump from promoting an economic recovery .
Moving on, the economic calendar seems to be lighter and therefore keep trade / virus updates in the spotlight for a new direction.
The NZD / USD has progressively increased since early April, but has so far failed to break through the 100-day EMA, currently around 0.6175, on a daily close basis. In addition to the 100-day EMA, the resistance line of a short-term bullish channel, at 0.6205, also controls the bullish. Meanwhile, the 50-day EMA near 0.6080 can offer close support during the pair’s U-turn before 0.6000 on the round digit. However, a major drawback is not expected unless the listing breaks the formation of channels by sliding under the 0.5930 support.