It has been a rough start to the week for the New Zealand dollar, as NZD/USD is down almost one percent this week. The pair is currently trading at 0.6665, down 0.40% on the day.
NZ manufacturing releases in focus
New Zealand releases Manufacturing Sales later on Tuesday. This indicator is published quarterly, which magnifies the impact of each release. In the first quarter, the indicator slowed to a flat 0.0%, after a respectable gain of 2.4% in the Q4 of 2019. Will we see a gain in the second quarter? If so, we could see NZD/USD respond with gains.
Another manufacturing event, Business NZ Manufacturing Index, will be released on Thursday. The index has posted two successive readings which point to expansion, 56.3 in June and 58.8 in July. If the uptrend continues, it would be bullish for the New Zealand dollar.
Sandwiched in between these two manufacturing releases is ANZ Business Confidence. The indicator has been mired deep in negative territory, as the business sector remains pessimistic about economic conditions in the island nation. The August reading came in at -41.8 points. Although Covid-19 is under control in New Zealand, the economy is under strain since the global appetite for its exports has been greatly reduced due to the devastating economic impact of coronavirus.
NZD/USD Technical
NZD/USD was flat in the Asian session and has posted losses in European trade.
- NZD/USD broke below support at 0.6681 in the Asian session. This is followed by support at 0.6605
- There is resistance at 0.6714. Close by, there is resistance at 0.6735
- NZD/USD broke below the 10-day MA on Monday and continues to head lower