Current trend

The NZD/USD pair continues its correction dynamics near 0.6126. The dynamics of the New Zealand dollar will depend on the outcome of the Reserve Bank of New Zealand (RBNZ) monetary policy meeting, which will be held tomorrow at 03:00 (GMT 2).

Analysts assume that, despite the insufficient achievement of inflation and employment targets, the regulator will adjust the interest rate by –50 basis points from 5.25% to 4.75%. Today’s annual report of the department confirmed it. The RBNZ head, Adrian Orr, notes significant progress in the fight against inflation, which decreased from 6.0% to 3.3% YoY. However, he emphasized that the authorities needed to act carefully to avoid additional pressure on the economy and contribute to a faster recovery of the indicators.

The American dollar is trading at 102.10 in the USDX, retreating from the highs reached at the end of last week amid the officials’ rhetoric. Thus, St. Louis Federal Reserve Bank President Alberto Musalem noted that he is sticking to a policy of easy monetary pressure, advocating for interest rate cuts at future Fed meetings. However, he warned that the trajectory of inflation decline is not yet stable enough. On Thursday at 14:30 (GMT 2), analysts expect the September consumer price index to slow from 2.5% to 2.3% YoY and from 0.2% to 0.1% MoM, while the core indicator is likely to be consolidated around 3.2% and correct from 0.3% to 0.2%, respectively. It will serve as a key argument for the US Fed to continue its “dovish” rhetoric.

Support and resistance

The trading instrument is retreating from the support line of the ascending channel 0.6280–0.6200.

Technical indicators have almost given a sell signal: fast EMAs on the Alligator indicator are moving away from the signal line, and the AO histogram is forming downward bars below the transition level.

Resistance levels: 0.6150, 0.6220.

Support levels: 0.6100, 0.6000.

Trading tips

Short positions may be opened after the price declines and consolidates below 0.6100, with the target at 0.6000. Stop loss — 0.6150. Implementation period: 7 days or more.

Long positions may be opened after the price grows and consolidates above 0.6150, with the target at 0.6220. Stop loss — 0.6100.