NZD/USD in tight range as New Zealand retail sales bounces back
- The NZD/USD pair is little changed today after New Zealand released its electronic card sales data.
- The sales rose by 5.4% in September after falling by 8.9% in the previous month.
- Four of the tracked sectors rose while spending in fuel and hospitality continued to fall.
The NZD/USD price is slightly unchanged after some encouraging retail sales data from New Zealand. The pair is trading at 0.6640, which is still below last week’s high of 0.6673.
New Zealand retail spending rise
New Zealand has handled the first and second waves of the Covid-19 well. The country, which has a population of about 5 million people, has had less than 2,000 infections and about 25 deaths. Since September, the country has confirmed less than 30 new cases.
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Retail spending recovered in September as the capital city moved from level 3 to level 2 alert levels. According to the statistics bureau, retail card spending rose by 5.4% to $5.7 billion in September. The sales had slumped by 8.9% in the previous month. On a year-on-year basis, the sales rose by 7.3%.
With most people in New Zealand using cards to shop, the electronic card sales are usually seen as representative measures of the overall sales.
Sales rose in four of the six sectors that the bureau tracks. Furniture and appliances sales rose by 19% while the important hospitality sector rose by 13%. Fuel spending remained low and was down by 11%. In a statement, Kathy Hicks of the bureau said:
“Increased spending on longer-lasting goods, coincides with Auckland businesses re-opening at the start of September, after having to close during this region’s level 3 lockdown which started on 12 August.”
Still, the New Zealand economy is not out of the woods yet. For one, the important tourism sector is going through its worst slowdown ever. Recent numbers showed that external migration declined by 96% in September, which is a sign that the sector has a longer path to recovery.
Indeed, in a report today, the statistics bureau noted that the hospitality sector, particularly in the accommodation industry. While accommodation slumped by 29%, spending in restaurants rose by 0.2%.
NZD/USD technical outlook
The hourly chart shows that the NZD/USD pair reached a high of 0.6673 last week. Since then, it has moved below the previous support of 0.6660. It has also moved slightly below the 15-day and 25-day weighted moving averages. Today, the pair also formed a bullish engulfing pattern and is attempting to move above the two moving averages.
Therefore, due to the engulfing, I suspect that the price will continue rising as bulls attempt to move above the resistance level at 0.6660. The alternate scenario is where the price resumes the downward trend and moves below today’s low of 0.6628. Kickstart your trading career with our free forex trading courses.