Global macro overview for 17/02/2017:
The Retail Sales for the fourth quarter from New Zealand had been released overnight and they surprised market participants. Headline New Zealand retail sales volumes increased by 0.8% for the fourth quarter of 2016 following a revised 0.8% increase for the third quarter which was originally reported as 0.9%. The increase was below consensus expectations of a 1.0% increase, while the year-on-year increase slowed to 4.2% from 5.1% previously. The most active retail sector that advanced 1.9% in the fourth quarter was motor-vehicle and parts. The sharpest decline was seen in non-store and commission-based retailing which declined 5.6% following a 5.2% decline the previous quarter. There also was a significant decline in clothing and footwear sales for the quarter. In conclusion, there was no real change of trend estimates and the retail sales are likely to remain stable in the near term. Moreover, the data were not significant enough for Reserve bank of New Zealand to change the near-term policy implications.
Let's now take a look at the NZD/USD technical picture at the H1 time frame. The intraday support at the level of 0.7197 was broken and now the price is testing this level from the downside. Before the market will become more oversold, there is a chance for another leg down towards the next technical support at the level of 0.7147.
