NZD/USD: forming downward correction

Current trend

The NZ dollar, as well as other majors, tends to rise against the US one.

The main catalyst for such growth remains a significant decline in the USD due to negative releases in the main sectors of the economy, the tightening of monetary policy, and pessimistic comments by Fed’s representatives. Yesterday, the USD seriously weakened again amid comments by the head of the Treasury. He noted that the low rate positively affects the economy, and there will be no measures to stabilize the currency.

In view of this, the pair reached a key level of 0.7430, which is the upper limit of the upward range. Today, the pair has adjusted downwards in view of a decrease in demand.

At the end of the trading week, attention should be paid to data on the labor market, GDP and orders for durable goods in the USA.

Support and resistance

In the medium term, a deep correction is expected in view of a change of trade sentiments and an increase in demand for the oversold US dollar. Consolidation in the side channel is quite possible, then the pair will decrease to the levels of 0.7200, 0.7130. However, further growth of the pair to the level of 0.7480 is possible, and then a downward correction from this mark.

Technical indicators on the H4 chart are regrouping, the volume of long positions on MACD indicator is reduced, and Bollinger Bands are lined up horizontally.

Support levels: 0.7370, 0.7335, 0.7310, 0.7295, 0.7275, 0.7250, 0.7200, 0.7180, 0.7130.

Resistance levels: 0.7420, 0.7430, 0.7480, 0.7530, 0.7570, 0.7600.

Trading tips

Short positions may be opened from the current level; pending buying positions can be put from the local maximum level of 0.7430 with targets at 0.7200, 0.7130, and the stop-loss at 0.7510.

New Zealand Dollar vs US Dollar

Buy Sell Spread
0.73687 0.7366 27

Scenario

Timeframe Weekly
Recommendations SELL
Entry Point 0.7365
Take Profit 0.7200, 0.7130
Stop Loss 0.7510
Support levels 0.7130, 0.7180, 0.7200, 0.7250, 0.7275, 0.7295, 0.7310, 0.7335, 0.7370, 0.7420, 0.7430, 0.7480, 0.7530, 0.7570, 0.7600

Alternative scenario

Recommendations SELL LIMIT
Entry Point 0.7430
Take Profit 0.7200, 0.7130
Stop Loss 0.7510
Support levels 0.7130, 0.7180, 0.7200, 0.7250, 0.7275, 0.7295, 0.7310, 0.7335, 0.7370, 0.7420, 0.7430, 0.7480, 0.7530, 0.7570, 0.7600

NZD/USD: forming downward correction

The material published on this page is produced by the Claws&Horns Company and should not be considered as the provision of investment advice for the purposes of Directive 2004/39/EC; furthermore it has not been prepared in accordance with legal requirements designed to promote the independence of investment research and is not subject to any prohibition on dealing ahead of the dissemination of investment research.

Comments

comments