Current trend

The NZD/USD pair is showing moderate growth, correcting after an active decline the day before, which led to a renewal of the local lows of August 16. The instrument is testing 0.6060 for a breakout, while it is supported mainly by technical factors.

The macroeconomic backdrop remains relatively calm, with investors continuing to assess the prospects for further monetary easing by the US Federal Reserve and the Reserve Bank of New Zealand (RBNZ). The day before, New Zealand published mixed quarterly inflation statistics: the Consumer Price Index in the third quarter in annual terms slowed sharply from 3.3% to 2.2%, coming very close to the regulator’s target level. At the same time, in quarterly terms, the indicator accelerated from 0.4% to 0.6%, which was slightly lower than the forecast of 0.7%. Either way, the likelihood of another interest rate cut by the New Zealand regulator has increased.

In turn, about 89.0% of analysts, according to the Chicago Mercantile Exchange (CME Group) FedWatch Tool, expect the US Federal Reserve to reduce borrowing costs by 25 basis points in November after adjusting immediately by –50 basis points in September. Forecasts for the December meeting are still not so clear, but experts are generally inclined to favor another reduction of 25 basis points.

Today at 14:30 (GMT 2), the US will publish September Retail Sales statistics: according to preliminary estimates, the dynamics will accelerate from 0.1% to 0.3%, which could contribute to an increase in inflation risks in the country.

Support and resistance

Bollinger Bands on the daily chart show a steady decline. The price range is narrowing sharply, reflecting ambiguous nature of trading in the ultra-short term. MACD is trying to reverse upwards but preserves its previous sell signal (located below the signal line). It is necessary to wait for the trade signals from a technical indicator to become clear. Stochastic, after a short-term growth at the beginning of the week, reversed into a downward plane again, reacting to a noticeable decline in the New Zealand dollar the day before.

Resistance levels: 0.6082, 0.6100, 0.6119, 0.6145.

Support levels: 0.6052, 0.6030, 0.6000, 0.5975.

Trading tips

Short positions may be opened after a breakdown of 0.6052 with the target at 0.6000. Stop-loss — 0.6082. Implementation time: 2-3 days.

The development of the "bullish" trend with the breakout of 0.6082 may become a signal for opening long positions with the target of 0.6145. Stop-loss — 0.6052.