NZD/USD: ANALYSTS PREDICT A DECLINE IN US UNEMPLOYMENT FOR THE FIRST TIME IN FOUR MONTHS
| Scenario | |
|---|---|
| Timeframe | Weekly |
| Recommendation | BUY STOP |
| Entry Point | 0.6240 |
| Take Profit | 0.6340 |
| Stop Loss | 0.6180 |
| Key Levels | 0.6120, 0.6200, 0.6240, 0.6340 |
| Alternative scenario | |
|---|---|
| Recommendation | SELL STOP |
| Entry Point | 0.6200 |
| Take Profit | 0.6120 |
| Stop Loss | 0.6240 |
| Key Levels | 0.6120, 0.6200, 0.6240, 0.6340 |
Current trend
The NZD/USD pair is trading at 0.6218, holding above the highs of the annual range of 0.6200–0.5870 due to the American currency weakening.
The New Zealand dollar has little effect on the asset’s dynamics amid the lack of positive macroeconomic publications and low economic activity. Thus, the Q2 construction work amounted to 8.2B New Zealand dollars, 0.2% lower than before, the seasonally adjusted figure decreased by 0.7% to 5.2B New Zealand dollars, and the volume of non-residential real estate construction – by 0.1% to 3.0B New Zealand dollars. As a result, spending on the construction of houses increased by 3.6% and non-residential premises by 3.7%, which reflects the extremely poor state of the sector and puts pressure on the economy.
The main driver of the NZD/USD pair, the American dollar, is holding at 100.90 in the USDX after the labor market poor data. Nonfarm payrolls increased by only 99.0K instead of 111.0K previously. At 14:30 (GMT 2), investors will focus on similar data from the US Bureau of Labor Statistics, which, according to analysts, should reflect an increase of 164.0K from 114.0K previously. In addition, in August, the unemployment rate may adjust from 4.3% to 4.2%, which will be the first decrease in the indicator after four months of positive dynamics.
Support and resistance
The trading instrument is trying to consolidate above the resistance line of the sideways channel 0.6200–0.5870. Technical indicators maintain a buy signal: fast EMAs on the Alligator indicator are moving away from the signal line, holding at a significant distance from it, and the AO histogram is forming ascending bars above the transition level.
Resistance levels: 0.6240, 0.6340.
Support levels: 0.6200, 0.6120.
Trading tips
Long positions may be opened after the price rises and consolidates above 0.6240, with the target at 0.6340. Stop loss is 0.6180. Implementation period: 7 days or more.
Short positions may be opened after the price falls and consolidates below 0.6200, with the target at 0.6120. Stop loss is 0.6240.
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