- NZD/USD climbs as US stock futures extend Friday’s risk-on rally.
- New Zealand’s consumer spending tanked in April, official data showed early Monday.
- The pair appears on track to test the 2020 bearish trendline.
NZD/USD is flashing green at press time with the bulls ignoring the dismal New Zealand consumer spending data released early Monday.
The pair is currently trading near 0.6155, representing a 0.30% gain on the day, having found bids near 0.6120 three hours ago.
Spending drops amid lockdown
Retail card spending across New Zealand fell by more than $2.6 billion in April as non-essential businesses temporarily shut during the coronavirus-led lockdown, the official data showed on Monday.
That is the largest fall in both dollar terms and percentage change terms since the records began in 2002.
The decimation of consumer spending was expected and possibly priced in during March when the virus spread across the globe, triggering recession fears. The Kiwi fell by 4.54% in March to register its first three-month losing streak since mid-2019.
Another possible reason for the growth-linked NZD’s resilience could be the risk-on action in the US stock futures. At press time, the futures tied to the S&P 500 are reporting a 0.52% gain, which means the index is likely to extend Friday’s 1.69% rally.
The improved risk appetite could be associated with the continued optimism that the coronavirus-related restrictions will be eased in the US and around the world.
While the US Nonfarm Payrolls data for April released on Friday showed record job losses, the actual print was somewhat better-than-expected.
Eyes trendline resistance
Having bounced from session lows near 0.6120 amid the risk-on in the US stock futures, the pair now looks set to test the resistance of the trendline falling from Jan. 2 and March 9 highs. At press time, that hurdle is located at 0.6177.
A close higher would imply bullish reversal and open the doors to the 200-day average at 0.6335.