US dollar moved a bit lower this past week and it looks like there is a possibility of more losses in the near to medium term.
In New Zealand retail sales released by the Statistics New Zealand came in at 1.70% in the fourth quarter of 2014 whereas the last reading was a gain of 1.5% and expectation was of 1.25%.
New Zealand core retail sales registered a reading of 1.5%, whereas the last time gain was of 1.4%.
Japanese Gross Domestic Product released by the Cabinet Office registered a reading of 0.6%, compared to the last decline of 0.5% and the market was expecting it to be around 0.9%.
Japanese Gross Domestic Product annualized registered a reading of 2.2% in the fourth quarter of 2014, compared to the last decline of 1.9%.
Japanese GDP Deflator released by the Cabinet Office registered a reading of 2.3% in the fourth quarter of 2014, compared to the same quarter of the preceding year.
Forex market might remain quiet today as there is no major risk event lined up in the Euro area.
The New Zealand dollar managed to climb higher in the near term against the US dollar, but it was seen struggling around the 0.7500 resistance area. The 50% fib retracement level of the last leg from the 0.7816 high to 0.7183 was also sitting around the same area. However, there was a critical point to note that the NZDUSD pair managed to clear a bearish trend line on the 4 hour chart, which was also coinciding with the 100 moving average. The 4H RSI is well above the 50 mark, which is also a positive sign in the near term.
Intraday Support Level – 0.7400
Intraday Resistance Level – 0.7500
Overall, as long as the pair is above the 100 4-hour MA it might continue trading higher.
A break below the same could take the pair towards the 0.7300 level.
On the upside, the 50% fib level is a major hurdle for the pair, which if cleared might open the doors towards the 200 MA.
The US dollar struggled recently as mentioned earlier. It breached an important level against the Canadian dollar and broke a bullish trend line on the 4 hour. The USDCAD pair also cracked the 100 4-hour simple moving average, which is a solid bearish sign in the short term. Currently, the pair is likely heading towards the 50% fib retracement level of the last leg from the 1.1931 low to 1.1277 high. Let us see how the US dollar buyers react if the USDCAD pair reaches there. A break below the same might take the pair towards the last swing low.
Intraday Support Level – 1.2380
Intraday Resistance Level – 1.2520
Selling rallies around the 1.2520 level line look like a good option.
A break above the same might call for more gains moving ahead.
On the downside, the most important support area now can be seen around the 4-hour 200 SMA.
New Zealand dollar traded lower this past week after solid gains against the US dollar, but found support around and important area which means there is a chance of recovery in the near term.