Current trend

The NZD/USD pair is correcting against poor dynamics of the American dollar and positive statistics from New Zealand near the 0.6262 mark.

Thus, the total volume of new home construction for the year ending in July amounted to 33.921K, 22.0% lower than the same period last year, and 18.503K multi-family buildings were approved, 28.0% lower than the previous figure, and 15.418K detached buildings, down 14.0%. Nevertheless, in July, the number of approvals increased by 3.352K or 9.6%, reflecting the likelihood of a change in the trend to positive. The number of separate houses increased the most in a month – by 42.0%.

The American dollar has shown a local reversal, trading at 101.20 in USDX, supported by Q2 gross domestic product (GDP), which added 3.0% from 1.4% earlier, exceeding the forecast of 2.8%. Initial jobless claims fell from 233.0K to 231.0K but the total number of applications was 1.868M, above 1.855M previously.

After the speech of the US Fed Chairman Jerome Powell at the Economic Symposium in Jackson Hole, market participants are confident that the interest rate cut cycle will begin in September. However, the size of the first reduction in borrowing costs is still unknown. Most experts expect an adjustment of –25 basis points but the change may be –50 basis points. Against this background, today’s report on personal consumption expenditure will have a key influence on the authorities’ decision. Analysts expect the core index to accelerate from 2.6% to 2.7% in July, and the broader one from 2.5% to 2.6%, serving as another argument in favor of changing the rhetoric to “dovish”.

Support and resistance

The trading instrument is correcting, trying to consolidate above the resistance line of the sideways channel 0.6230–0.5880.

Technical indicators have given a buy signal: fast EMAs on the Alligator indicator are moving away from the signal line and staying far from it, and the AO histogram is forming ascending bars above the transition level.

Resistance levels: 0.6300, 0.6420.

Support levels: 0.6230, 0.6080.

Trading tips

Long positions may be opened after the price rises and consolidates above 0.6300, with the target at 0.6420. Stop loss — 0.6250. Implementation period: 7 days or more.

Short positions may be opened after the price falls and consolidates below 0.6230, with the target at 0.6080. Stop loss — 0.6300.