The New Zealand dollar dropped sharply on Monday and was trading 0.5% weaker during the London session and was trading around the 0.69 level in the morning.
Retail sales for the first quarter came out very weak and printed 0.1%, way below expectations of 1.0%. Furthermore, the previous number was revised lower from 1.7% to 1.4%. Core retail sales also slowed from 1.8% to 0.6%. In addition, visitor arrivals stayed negative and marginally improved from -1.5% to -1.3%. The kiwi slid after these numbers.
There are no major data on the agenda today, but the greenback appears to be strengthening broadly again and therefore the current bearish bias on the NZDUSD pair could prevail throughout the day.
The NZDUSD pair is still limited by the strong bearish trend line, which is currently around 0.6930. As long as the pair trades below, the outlook looks bearish.
The key support is at the current cycle lows around 0.6850 and if not held, the kiwi might deteriorate toward the 0.68 handle in the initial bearish reaction. In all cases we strongly recommend to have rigorous money and risk management.
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