Current trend

The NZD/USD pair is trading with near-zero dynamics, holding near 0.6090. Market activity remains subdued as trading floors in the US are closed for Columbus Day celebrations. Meanwhile, New Zealand's macroeconomic data released this morning were mixed, with the Business NZ PSI rising to 45.7 points in September from 45.5 points, and Electronic Card Retail Sales falling sharply by 5.6% year-on-year from –2.9% the previous month, and by 0.2% month-on-month to 0.0%.

Some pressure on the instrument's position was also exerted by data from China presented last weekend, where the Consumer Price Index in September slowed from 0.6% to 0.4% year-on-year, and from 0.4% to 0.0% month-on-month, while analysts expected the previous dynamics to be maintained. Producer Price Index for the same period showed an acceleration in the rate of decline from –1.8% to –2.8%, while analysts had expected –2.5%.

In addition, pressure on the instrument remains after the Reserve Bank of New Zealand (RBNZ) reviewed its monetary policy parameters last week: as expected, the regulator adjusted the interest rate by –50 basis points to 4.75%, noting significant success in combating high rates of inflation growth.

Investors are also assessing the impact of inflation data on the Fed's future monetary policy: recall that in September, the Consumer Price Index slowed from 2.5% to 2.4% against a forecast of 2.3%, and the Core CPI increased from 3.2% to 3.3%, further strengthening analysts' belief that the regulator will reduce borrowing costs by only 25 basis points in November.

Support and resistance

Bollinger Bands on the daily chart show a steady decline. The price range expands, making way to new local lows for the "bears". MACD is falling, keeping a relatively strong sell signal (the histogram is below the signal line). Stochastic, on the contrary, maintains rather confident upward direction, signaling in favor of the development of a full-fledged upward correction in the near future.

Resistance levels: 0.6100, 0.6124, 0.6145, 0.6177.

Support levels: 0.6082, 0.6052, 0.6030, 0.6000.

Trading tips

Short positions may be opened after a breakdown of 0.6082 with the target at 0.6030. Stop-loss — 0.6120. Implementation time: 1-2 days.

A rebound from 0.6082 as from support followed by a breakout of 0.6100 may become a signal for opening new long positions with the target at 0.6145. Stop-loss — 0.6075.