KIWI LOSES PREVIOUS GAINS AMID WEAK GDP DATA

The NZD/USD price could not continue the sharp upward impulse and lost ground on the background of a couple of recent events. Firstly, was the hawkish rhetoric of the Fed which noted the strength of the American economy that allows the central bank to continue a gradual movement towards normalization of monetary policy in the US. The negative impulse accelerated after the publication of disappointing data on New Zealand’s GDP, which expanded by only 0.5% in the first quarter, compared to the forecasted increase by 0.7%. Growth in the milk industry, the major exporter in the country, was partially offset by the slowdown in retail sales and construction.

Currently the price is below the important level of 0.7225, but can show the upward correction within the ascending channel. The trigger for changing the ongoing upward trend to negative, may come from breaking through the support at 0.7190. In such a case the closest targets will be 0.7150, 0.7050 and 0.7000. Today traders will monitor the news from the US with reports coming in for unemployment claims at 12:30 GMT, industrial production in May at 13:15 GMT and NAHB housing market index at 14:00 GMT.