Current dynamics

Against the backdrop of the strengthening of the US dollar, the NZD/USD pair is correcting at the level of 0.5891.

The New Zealand currency is under pressure from macroeconomic data on the property market: in October, the number of building permits amounted to 2,850 thousand, down 6.9% from a year earlier, and for the year ending in October, the figure reached 33,467 thousand, down 16.0%. Statistics by housing category reflect a negative trend in the sector, since out of the total number of approved houses, 1,174 thousand are townhouses (-15.0%), 0,183 thousand are apartments (-24.0%) and 0,130 are rural buildings (-29.0%). Thus, the current state of the housing sector is close to the minimum levels of January.

The US dollar is trading at 106.30 in USDX amid positive expectations from the publication of business activity reports today at 16:45 (GMT 2) and 17:00 (GMT 2): according to preliminary estimates, in November the indicator in the manufacturing sector from S&P Global will correct from 48.5 points to 48.8 points, interrupting the negative trend, a similar value from the Institute of Supply Management (ISM) will accelerate from 46.5 points to 48.8 points, and the price index in this sector may increase from 54.8 points to 55.2 points.

Support and resistance levels

The trading instrument is correcting near the support line of the “expanding formation” pattern with dynamic boundaries of 0.6460–0.5800.

Technical indicators maintain a downward signal: fast EMAs on the Alligator indicator are held below the signal line, and the AO histogram forms correction bars below the transition level.

Resistance levels: 0.5920, 0.6020.

Support levels: 0.5870, 0.5800.

Trading scenarios

Short positions can be opened after the price declines and consolidates below 0.5870 with a target of 0.5800. Stop loss is 0.5900. Implementation period: 7 days or more.

Long positions can be opened after the price rises and consolidates above 0.5920 with a target of 0.6020. Stop loss is 0.5880.