Weak Retail Sales Push NZD Lower: Charts
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Retail Sales contracted in Q3, surprising the majority of analysts who forecasted a mild increase. Core retail sales decrease by 0.3% amidst a 0.6% estimate, while Retail Sales dropped 0.4% vs a 0.4% estimated gain. This new development pressed Kiwi lower which was already softer due to the weak employment data announced last week.
A new trading range has been established following the news, with the current resistance slightly above 0.817, and a good distance away from the previous support around 0.8185.
The weakness of Kiwi is best demonstrated by AUD/NZD, which shows stability in prices before and after the news, implying a change in fundamental pricing difference and not due to knee-jerk overreaction.
On the other hand, NZD/JPY has recovered due to JPY weakening on political concerns as PM Noda indicated that current Parliament will be dissolved on Nov 16th. We're currently trading in the range pre Retail announcement with 65.0 acting as support once more should the bullish move fades.
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