Current trend

This week, the NZD/USD pair showed ambiguous dynamics: at first, it fell to the area of 0.6065 but is currently recovering lost positions.

The New Zealand currency was under pressure from the decision of the Reserve Bank of New Zealand (RBNZ), which at a meeting on Wednesday kept the interest rate at 5.50% but announced the possibility of an early transition to its reduction. In an accompanying statement, officials indicated that monetary policy would be softened in line with the slowdown in inflation, which is in stark contrast to earlier comments that allowed for a long-term retention of interest rates at current levels and even the possibility of their growth.

Currently, the NZD/USD pair has resumed its uptrend against the background of the correction of the US dollar after the publication of June inflation data on Thursday: YoY, the consumer price index (CPI) adjusted from 3.3% to 3.0%, and the base indicator – from 3.4% to 3.3%. In combination with the slowdown in the economy and the labor market, these statistics create prerequisites for the start of a correction of monetary policy by the US Federal Reserve at the September meeting: officials recognize the positive effect of the steps already taken to curb price pressure, but the timing of the start of active actions to reduce the interest rate is still not called.

Support and resistance

Technically, the asset has been trading in the range of 0.6140–0.6075 for the fourth week (38.2% and 50.0% Fibonacci retracement) and cannot leave it yet. Currently, the price is aiming at 0.6140, the breakout of which will ensure further growth towards the targets of 0.6225 (Murrey level [6/8], 23.6% Fibonacci retracement) and 0.6286 (Murrey level [7/8]). The key level for the "bears" remains 0.6075, consolidation below which will allow quotes to continue moving to the area of 0.5981 (Murrey level [2/8]).

Technical indicators do not give a clear signal: Bollinger Bands are reversing down, MACD is at the zero line, its volumes are insignificant, and Stochastic is pointing down, but it is approaching the oversold zone, which may cause a reversal.

Resistance levels: 0.6140, 0.6225, 0.6286.

Support levels: 0.6075, 0.5981.

Trading tips

Long positions can be opened above the level of 0.6140 with targets of 0.6225, 0.6286 and stop-loss around 0.6090. Implementation period: 5–7 days.

Short positions should be opened below the 0.6075 mark with the target of 0.5981 and stop-loss around 0.6130.