Current dynamics

The NZD/USD pair shows mostly flat dynamics: the instrument remains near the 0.5875 mark, remaining under pressure from macroeconomic statistics, which point in favor of slower monetary policy easing in the US.

So, the day before, investors paid attention to November data on business activity in the manufacturing sector: the index from S&P Global rose from 48.8 points to 49.7 points, and the index from the Institute for Supply Management ( ISM ) - from 46.5 points to 48.4 points with expectations of 47.5 points. Meanwhile, according to the FedWatch Tool of the Chicago Mercantile Exchange ( CME Group ), the probability of the US Federal Reserve at the next meeting (December 17-18) cutting interest rates by a quarter of a percentage point is about 75.0%, but at the end of the week the November labor market report will be presented, which may also adjust these expectations: analysts believe that the number of new jobs created outside the agricultural sector will increase by 195.0 thousand after an increase of only 12.0 thousand in the previous month, average hourly earnings will slow from 0.4% to 0.3% on a monthly basis and from 4.0% to 3.9% on an annual basis, and the unemployment rate may be revised at this point from 4.1% to 4.2%. On Friday at 17:00 ( GMT 2 ), the University of Michigan index will also be released, which is calculated monthly based on a telephone survey of at least 500 US households and records consumer spending as part of economic activity: the index is expected to rise from 71.8 points to 73.3 points.

Meanwhile, investors are assessing statistics from New Zealand, which hit the market the day before: Thus, the number of building permits issued in October fell by 5.2% after a correction of 2.4% in the previous month. In turn, the Caixin index rose  China's manufacturing PMI rose from 50.3 points to 51.5 points in November, which turned out to be much higher than the initial estimate of 50.5 points. Earlier, the country provided similar data in the services sector, which recorded a slowdown from 50.2 points to 50.0 points.

Last week, the Reserve Bank of New Zealand ( RBNZ ), as expected, cut interest rates for the third time in a row by 50 basis points to 4.25%, in an attempt to stimulate the national economy as GDP slows. It lost 0.2% in the June quarter compared to the previous period. Officials stressed that inflationary pressures have eased and the rate remains roughly in the middle of its medium-term target range of 1.0-3.0% (2.2%), and if economic conditions are favorable, the regulator is likely to cut borrowing costs at a faster pace early next year.

Support and resistance levels

Bollinger Bands on the daily chart show flat dynamics: the price range remains almost unchanged, remaining quite wide for the current level of market activity. The MACD indicator grows slightly, maintaining a very weak buy signal (the histogram is above the signal line). The Stochastic indicator, having retreated from its maximum values, has turned to a bearish level, indicating a possible full-fledged downtrend in the very short term.

Resistance levels: 0.5885, 0.5920, 0.5950, 0.5975.

Support levels: 0.5858, 0.5830, 0.5800, 0.5750.

Trading Tips

Short positions can be opened after a confident breakout of the 0.5858 level to the downside with a target at 0.5800. Stop loss - 0.5885. Execution period: 2-3 days.

A bounce from the 0.5858 level as support followed by a break above the 0.5885 level could become a signal to open long trades with a target at 0.5950. Stop loss - 0.5858.