The New Zealand dollar, also known as the Kiwi, was trading 0.20% stronger during the London session on Wednesday and the NZDUSD pair was hovering around the 0.67 mark.
Traders bought the Kiwi after New Zealand Q2 retail sales surpassed expectations and rose 1.1% quarter-on-quarter, up from 0.3% and well above analysts’ estimates of 0.4%. The ex-auto gauge also accelerated higher and jumped from 0.6% to 1.4%, while the market had expected only a marginal improvement to 0.8%.
The greenback remains pressured after the latest wave of Trump dovish comments, but so far, the overall trend still favors buying dips on the US dollar.
Investors will now pay attention to today’s US existing home sales for the month of July, which are seen sliding 0.1% month-on-month, down from 1.4% in the previous month. In addition, volatility could be spurred by the FOMC minutes, which are due in the evening.
The sharp relief rally continues and the pair is poised to test another strong resistance at 0.6725, where previous lows are seen. If the kiwi jumps above, the bearish trend would be cancelled, with the next target at the broken bullish trend line, slightly below the 0.68 level.
On the downside, bids could be located at 0.6685, which is an important support for bulls. Should this level fall, the pair could deteriorate toward 0.6650 in the initial reaction.