Current trend

Amid stable dynamics of the American dollar and poor statistics from New Zealand, the NZD/USD pair is correcting at 0.6012.

Thus, for the quarter ending in June, the unemployment rate increased from 4.4% to 4.6% compared to 3.6% a year earlier, adding 33.0K and reaching 143.0K – the June 2021 high. The largest increase in the indicator is due to the category of young people aged 15–24 years, amounting to 14.4K QoQ. The labor cost index or wage inflation also renewed the anti-record in the public sector, reaching 6.9%, and the average hourly wage there adjusted by 7.9% to 49.56 New Zealand dollars. As a result, the labor market continues to slow down, which will undoubtedly put pressure on the economy in the long term.

The American dollar is holding at 102.90 in the USDX. The currency’s volatility has weakened as the volume of published macroeconomic data has significantly decreased. At the moment, investors are trying to assess the impact of statistics on the market, preparing for the publication of the consumer price index on Wednesday at 14:30 (GMT 2). The July report will be one of the key ones to confirm the intentions of US Fed officials to adjust the interest rate by –50 basis points in September. Analysts’ forecasts, assuming a decrease in inflation to 2.9% from 3.0%, are consistent with expectations for the cost of borrowing.

Support and resistance

The trading instrument is correcting, retreating from the support line of the sideways channel 0.6220–0.5860. Technical indicators are holding the sell signal: fast EMA on the Alligator indicator are approaching the signal line, and the AO histogram is forming ascending bars below the transition level.

Resistance levels: 0.6030, 0.6120.

Support levels: 0.5980, 0.5880.

Trading tips

Long positions may be opened after the price consolidates above 0.6030, with the target at 0.6120. Stop loss is 0.5980. Implementation period: 7 days or more.

Short positions may be opened after the price consolidates below 0.5980, with the target at 0.5880. Stop loss is 0.6020.