Global macro overview for 15/05/2017:
According to the Statistics New Zealand, the first quarter retail sales from New Zealand were better than anticipated. Market participants expected a 1.1% increase from a 0.9% rise a month ago, but the figure revealed was at the level of 1.5%. The total value of sales increased 2.6% quarter-on-quarter. Besides, March was the 18th consecutive quarter when retail sales contributed positively to the economy. It is worth to notice, that the consumer spending in New Zealand accounts for 60% of the overall economy and retail sales are the important part of the consumer spending. In conclusion, the next GDP reading should beat market expectations.
Let's now take a look at the NZD/USD technical picture in the H4 timeframe. The market bounced from the technical support at the level of 0.6818, broke out above the technical resistance at the level of 0.6879 and now is trading back in the congestion zone between the levels of 0.6946 - 0.6879. Nevertheless, despite the stochastic indicator bouncing up from the oversold levels, the price is still trading below all of the moving averages and as long as the technical resistance at the level of 0.6946 is not violated, the chances for any strong bullish rally are minimal.
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