The retracement we were talking about last week did not seem to matter too much for the NZDUSD bulls as the quotation broke the resistance level from 0.8700 and flied to a new annual high of 0.8745. Well, the macroeconomic data had its part as the good numbers that came from the economy showed that the recovery is stable. The NZIER Business Confidence had the same value as last month, while the Business NZ Manufacturing Index increased from 56.5 to 58.4, REINZ HPI indicators soared to 3.4% from 2.1% last month.
Also, the New Zeeland dollar took advantage of an international selloff momentum of the US dollar after the macroeconomic data from the United States economy fall short of the analyst expectations and it seemed that maybe investors did hurry up with the possibility of hiking the interest rates earlier than it has been forecasted.
Due to the fact next week is poor in macroeconomic publication from New Zeeland, I will add the most important indicators from the United States that could have an impact on the NZDUSD quotation.
USD: Core Retail Sales m/m- (1:30 GMT)-Monday. It is the version of the indicator that measures the change in the total value of sales at the retail level, excluding automobiles. Automobile sales account for about 20% of Retail Sales but they tend to be very volatile and distort the underlying trend. For April it is forecasted an improvement from 0.3% to 0.5%.
USD: Core CPI m/m (1:30 GMT)-Tuesday. This indicator measures the change in the price of goods and services purchased by consumers, excluding food and energy, which are volatile. Even though is a high impact indicator, in the last five months did not create too much surprise, being constantly at 0.1%, the value which is forecasted for April as well.
NZD: CPI q/q (23:45 GMT)-Tuesday. This indicator is released quarterly and even though this is extremely late relative to inflation data from other countries, it is the primary gauge of consumer prices and tends to create hefty market impacts. For the first quarter of the year it is expected a rise from 0.1% to 0.5%, so it will create some serious volatility if there will be any surprises.
USD: Unemployment Claims (1:30 GMT)-Thursday. It measures the number of individuals who filed for unemployment insurance for the first time during the past week. It will be interesting to follow this indicator as last week we had the best reading since 2007.
Support: 0.8620, 0.8500
Resistance: 0.8740, 0.8850
On the daily chart there still can be drawn a rising wedge, a bearish pattern, but the outlook is far from bearish right now. The Friday candlestick has a large inferior shadow that suggests the buyers were in control. The same story tells the MACD Histogram, that shows us how the bears are losing their power and it approaches a crucial point that could give the bulls some strength.
Support: 0.8510, 0.8620
Resistance: 0.8740, 0.8800
On the hourly we can see how the quotation bounced between the support line from 0.8620 and the resistance line from 0.8740, leaving behind an undecided picture. The MACD histogram is decreasing, but the two moving averages seems to point towards another wave of buyers, so we can see a continuation of the ascending trend next week as well.
Bullish or Bearish
As a final conclusion, I think the US dollar was oversold last week and we could see a retracement and an appreciation of the green buck in the week to come. On the other hand, the strength NZDUSD showed recently makes me to see a moderately bullish perspective for the New Zeeland Dollar and we could see a week in which the quotation will close on green, but by a narrow margin.