NZD/USD: DIAGONAL LEVELS ANALYSIS
| Scenario | |
|---|---|
| Timeframe | Weekly |
| Recommendation | BUY STOP |
| Entry Point | 0.6210 |
| Take Profit | 0.6323 |
| Stop Loss | 0.6160 |
| Key Levels | 0.5863, 0.6037, 0.6210, 0.6323 |
| Alternative scenario | |
|---|---|
| Recommendation | SELL STOP |
| Entry Point | 0.6037 |
| Take Profit | 0.5863 |
| Stop Loss | 0.6100 |
| Key Levels | 0.5863, 0.6037, 0.6210, 0.6323 |
Current trend
The NZD/USD pair is correcting at 0.6182 with the support of macroeconomic statistics.
Thus, in August, food prices in New Zealand fell from 0.6% to 0.4% YoY against a 12.2% decline in the cost of fruits and vegetables, with potatoes leading the way (–26.6%), while petrol prices fell by 1.7% and diesel fuel by 2.8%. Positive dynamics may slow inflation, which has not been recorded for several months.
The American dollar is trading at 101.00 in the USDX, reacting negatively to yesterday’s labor market data. This week, initial jobless claims were 230.0K, higher than 228.0K previously and the expected 227.0K. The total claims increased from 1.845M to 1.850M, justifying forecasts, and the average for the last four weeks increased from 230.25K to 230.75K.
Under these conditions, the growth of the NZD/USD pair looks like the most likely scenario.
Support and resistance
On the daily chart, the trading instrument moves between the first-order levels (I), and after reaching the second-order right support level (II) at 0.6143, the price began an upward correction. If the price continues to rise, further dynamics will develop in a poor uptrend, where the local crossover level of the right resistance of the third order (III) and the left resistance of the second order (II) at 0.6210 will become a new target. The next target is the crossover of the left resistance of the second order (II) and the right resistance of the second order (II) at 0.6322.
An alternative scenario is a decline to the crossover of the right support of the third order (III) and the left support of the first order (I) at 0.6037, after which a decline may the crossover of the left support of the third order (III) and the right support of the first order (I) 0.5863.
Resistance levels: 0.6210, 0.6323.
Support levels: 0.6037, 0.5863.
Trading tips
Long positions may be opened after the price consolidates above 0.6210, with the target at 0.6323. Stop loss is around 0.6160. Implementation period: 7 days or more.
Short positions may be opened after the price consolidates below 0.6037, with the target at 0.5863. Stop loss is around 0.6100.
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