Current trend

After a strong fall last week, the NZD/USD pair settled at 0.5996 and may correct upward if the American dollar weakens.

The long-term trend reversed downwards after the US Federal Reserve kept the interest rate at 5.50%: the reason for the strengthening of the American dollar was strong macroeconomic data, which may delay the transition to a “dovish” rate. Thus, initial jobless claims are at 210.0K, less than the forecast of 212.0K, sales of existing housing in February increased by 9.5% MoM, significantly higher than the forecast of a decrease of 1.3%, with the fact that in quantitative terms the figure was 4.38M compared to estimates of 3.95M.

The New Zealand currency is affected by negative trends in the national economy: Q4 gross domestic product (GDP) was –0.1%, worse than preliminary estimates of 0.1%, inflation was 4.7% YoY, and Q4 unemployment was – 4.0%, above expectations of 3.9%.

Thus, at the moment, there are no global prerequisites for the growth of the NZD/USD pair.

Support and resistance

The long-term trend reversed downwards last week when the support level of 0.6078 was broken, after which the price reached 0.5996, from which long positions with the target at the resistance level of 0.6085 are relevant, and in case of the breakout, a decline to 0.5865 is expected.

The medium-term downward trend continued last week: the quotes broke through the support level of 0.6045, and the next sales target is zone 3 (0.5949–0.5935). If the asset tests the trend border around 0.6139–0.6125, short positions with the target at the current week’s low of 0.5990 are relevant.

Resistance levels: 0.6085, 0.6205.

Support levels: 0.5996, 0.5865.

Trading tips

Long positions may be opened from 0.5996 with the target at 0.6085 and stop loss around 0.5965. Implementation time: 9–12 days.

Short positions may be opened below 0.5965 with the target at 0.5865 and stop loss around 0.6002.