Current trend

Amid negative statistics from New Zealand and before the US labor market data, the NZD/USD pair is correcting downwards with the target at 0.6185.

The Q3 business confidence index from the New Zealand Institute of Economic Research (NZIER) was –1.0% against the forecast of –34.0%, and capacity utilization was 89.1% against 90.5%. The August building permits fell by 5.3% MoM, below the previous 26.4% but above expectations of –6.8%.

Yesterday’s Institute for Supply Management (ISM) data supports the American dollar. The September non-manufacturing PMI reached 54.9 points, although experts expected 51.7 points, and the non-manufacturing price index was 59.4 points against 56.3. Today, investors will pay attention to the labor market data. According to preliminary estimates, the September nonfarm payrolls will increase to 147.0K, and unemployment will remain at 4.2%, supporting the national currency.

The long-term trend remains upward. At the end of September, the trading instrument tested the resistance level of 0.6350 (December high) and went into correction. Within it, the price broke the support level of 0.6257 and headed to 0.6185, where long positions, with the target at 0.6295, are relevant. After a breakdown of 0.6185, it may reach the trend border of 0.6105. The RSI indicator (14) was in the overbought area at the end of September when testing the resistance level of 0.6350. Now, its line goes into the neutral area, allowing both purchases and sales.

The medium-term trend remains upward. The price is trading below the key support area of ​​0.6239–0.6225. After a consolidation below, the trend will change downwards, and short positions, with the target in zone 2 (0.6099–0.6085), are relevant. If the quotes return to the trend key support level after the American labor market data publication, long positions, with the targets of 0.6302 and 0.6379, are relevant.

Support and resistance

Resistance levels: 0.6296, 0.6379.

Support levels: 0.6185, 0.6105, 0.5980.

Trading tips

Long positions may be opened from 0.6185, with the target at 0.6295 and stop loss 0.6145. Implementation period: 7–9 days.

Short positions may be opened below 0.6145, with the target at 0.5980 and stop loss 0.6195.