NZD/USD rebounds from six-day lows after US data

• US economic data helped risk appetite and the New Zealand Dollar on Thursday.
• Wall Street is in red after the opening but off lows, commodities rebound.
• NZD/USD attempts to regain 0.6400, still negative for the day.
• NZ Prime Minister Jacinda Arden is to step down.  

The NZD/USD rebounded from the lowest level since last Friday and climbed to 0.6402, supported by an improvement in market sentiment following the release of better-than-expected US economic data. The New Zealand Dollar is still down for the day, unaffected by the resignation of NZ PM Jacinda Ardens.

Positive economic news from the US

Thursday is proving to be a different day than Wednesday when Retail Sales and Industrial Production reports showed larger-than-expected declines for December. Data released on Thursday came in mostly above expectations. Initial Jobless Claims fell below 200K to the lowest level in four months. The Philly Fed rose more from -13.7 to -8.9.

Wall Street in red, but sentiment improves

The economic figures helped the US Dollar but also risk appetite that ended up weighing more on the Greenback, pushing NZD/USD away from the lows. Equity prices in Wall Street are still down but off lows, falling on average 0.50%. Crude Oil and Gold are rising by around 0.54%.

Politics in New Zealand

New Zealand Prime Minister Jacinda Ardern announced her term would end by February 7. She “does not have the energy” to seek re-election in the general elections that will take place on October 14. A new leader will be voted in a few days. The announcement had little impact on the Kiwi. The NZ main stock index fell 0.28%.

Volatility in AUD/NZD

The AUD/NZD bottomed during the Asian session at 1.0735 following the weaker-than-expected Australian employment report and then rebounded and turned positive for the day. It is back above 1.0800.

NZD/USD technical outlook

The NZD/USD is looking to trade back in the range with support at 0.6330/50 and resistance at 0.6410/20, after the retreat from the multi-month high it reached on Wednesday at 0.6529. The bias is still to the upside, as it holds above the 20-day Simple Moving Average that stands at 0.6335.

A firm daily close above 0.6450 should point to a test of the recent top and toward more gains. If NZD/USD is unable to do so in the short term, a deeper correction seems likely.

Technical levels