November 30, 2023

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Signal after strong New Zealand economic data by

Signal after strong New Zealand economic data by

NZD/USD Forecast: Signal after strong New Zealand economic data – Consolidation continued on Tuesday following the latest New Zealand retail sales figures. The pair traded at 0.5908, a few points above this month’s low of 0.5855. That’s down more than 9% from this year’s high.

New Zealand sales data and US inflation

The NZD/USD exchange rate has been under pressure in recent months as the US dollar index () has risen. The dollar rose to $105, its highest level in more than five months.

Economic data released on Tuesday showed New Zealand electronics sales rose 3.7% in August after rising 2.2% in July. These sales were up 0.7% from the previous month, indicating that spending is picking up.

New Zealand also benefited from increased visitor arrivals. Viewership increased to 19.3% in August from 11.3% in July. In the same period, the number of permanent residents fell to 5,786 from 8,549 in July.

The NZD/USD pair also fluctuated following New Zealand’s latest economic outlook. Statistics agency data suggest that the economy will remain stagnant for another two years. Its budget deficit will continue to rise in the coming months. In a statement issued by the Minister of Economy in this regard, the country is turning upside down.

The next major catalyst for NZD/USD prices will be the upcoming US Consumer Inflation data.The figures expect the headline Consumer Price Index (CPI) to have risen to 0.6% in August from 0.2% in July. On a year-on-year basis, headline inflation rose to 3.6%.

Most investors will focus on core inflation, which excludes volatile food and energy prices. Economists believe that core CPI has eased to 4.3% from 4.7%. The US will also release the latest retail sales figures on Thursday.

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NZD/USD Exchange Rate Forecast

TradingView NZDUSD Chart

My last forecast for NZD/USD three weeks ago was accurate. I had written that this pair will have a rough breakout. It has now moved below the key support level of 0.5980, which was the swing low on May 31. The pair has broken below the 50-day moving average and the descending trend line shown in red.

Hence, the pair is likely to continue falling as sellers target the key support at 0.5811, the October 7 swing high. The stop loss for this trade will be 0.5600.

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