The NZDUSD extended its three day decline to reach an intraday low of 0.7545 as New Zealand’s retail sales contracted 1.1 percent in December after climbing 1.5 percent the month prior amid expectations of -0.4 percent. The data is worrisome due to the fact that the region’s finance minister Bill English recently said that it is possible that the economy might have slipped in the fourth quarter of 2010, entering its second straight recession in two years. Indeed, the economic docket in New Zealand will be fairly muted, thus traders should closely monitor the fundamental developments in the world’s largest economy. On tap will be U.S. advance retail sales in addition to producer and consumer prices. As the dollar gains strength against most of its major counterparts, better than expected results could fuel the positive momentum in the greenback. All in all, I will look to stay short from 0.7580 with a stop at break-even and an open target.
Meanwhile, I was stopped out of my GBPUSD short from 1.5996 at 1.6050 as the British pound gains strength ahead of tomorrow’s U.K inflation release. As of late, expectations are for 4.0 percent. A reading in line or exceeding forecasts could lead the pound to push higher as price concerns step into the spotlight.
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