NZD/USD tests 0.5520 after weak retail spending data

New Zealand’s seasonally adjusted retail card spending fell 0.7%, or NZ$47 million, in October. Core retail spending, which excludes fuel and motor vehicles, fell 1.2%, or NZ$73 million. Fuel was the only retail category to rise, up 4.8% (NZ$25 million). Spending fell on durable goods by 2.1% (NZ$34 million), hospitality by 1.6% (NZ$23 million), consumables by 0.3% (NZ$7.5 million), motor vehicles by 2.0% (NZ$3.8 million), and apparel by 0.7% (NZ$2.2 million), according to Stats NZ.

The US Dollar Index (DXY) held above 103 on Friday as investors weighed the possibility of a larger Federal Reserve rate hike in December. A November 13 CME FedWatch reading put the implied probability of a 25-basis-point hike at 89% and the probability of a 50-basis-point move to 4.25%–4.50% at 11%. Uncertainty over the Persian Gulf also persisted after US President Donald Trump wrote on Truth Social on Thursday that Washington did not need a deal with Iran.

Support and resistance levels

NZD/USD continues to fall toward the lower boundary of the long-term descending channel discussed in our October 27 NZD/USD outlook. The channel’s dynamic boundaries are 0.5900 and 0.5480.

Technical indicators continue to favor the downside. The Alligator’s faster moving averages are beginning to pull away from the slower ones, while the Awesome Oscillator (AO) histogram is extending lower below zero.

Support levels are 0.5520 and 0.5410.

Resistance levels are 0.5570 and 0.5680.

Trading scenarios and NZD/USD forecast

A sustained break below 0.5520 could trigger the short setup, with a target at 0.5410 and a stop-loss at 0.5600. The expected time horizon is seven days or longer.

A sustained move above 0.5570 could trigger the long setup, with a target at 0.5680 and a stop-loss at 0.5500.