NZD/USD: is it possible to continue to grow? _01/06/2016

Trading recommendations

Sell ​​Stop 0.6770. Stop-Loss 0.6820. Take-Profit 0.6700, 0.6660, 0.6610, 0.6560, 0.6400

Buy Stop 0.6820. Stop-Loss 0.6780. Take-Profit 0.6860, 0.6900, 0.6980, 0.7000, 0.7050, 0.7100, 0.7240



Technical analysis

Today comes a number of major US and New Zealand data from 13:45 (GMT). Depending on the parameters available as a breakdown of the level 0.6795, followed by an increase to the level of 0.6860, and return to the downtrend from 0.6765 immediate goals (EMA144 on the daily chart), 0.6680 (May lows and lower line of the rising channel on the daily chart).

4-hour and daily charts indicators OsMA and Stochastic turned on long positions, but on the week - remain on the side of the sellers.

With the level of 0.7050, reached in mid-April, the pair NZD / USD has decreased by 5%, breaking through key support levels 0.6860 (23.6% Fibonacci level of the correction to the global reduction of the pair from the level of 0.8800, which began in July 2014 and EMA50 on the weekly chart) , 0.6795 (EMA200, EMA50 daily chart), 0.6765 (EMA144).

On the positive statistics from the New Zealand NZD / USD pair rose from the beginning of the week and returned to the important 0.6795 level (EMA200, EMA50), which acts now as a resistance level on the daily chart. Through this mark also passes the upper line of the descending channel and EMA200 on 4-hour chart.

In case of breaking the support level of 0.6680 will open the way to further reduce the levels of 0.6660, 0.6560 (the lower line of the rising channel on the weekly chart).

Break of this level will increase the risks of a further decline with the targets 0.6400, 0.6300 (2015 lows).

Alternative scenario implies a breakthrough resistance 0.6795 levels, 0.6860 and further growth within the rising channel on the daily chart with the upper limit near the level of 0.7100 with the targets 0.6980, 0.7050 (May and April highs, EMA200 monthly chart), 0.7100, 0.7240 (Fibonacci level 38, 2%)

Support levels: 0.6765, 0.6720, 0.6700, 0.6680, 0.6610, 0.6560

Resistance levels: 0.6795, 0.6820, 0.6860, 0.6910, 0.6980, 0.7050


Overview and Dynamics

Once in March, the central bank of New Zealand unexpectedly lowered its key interest rate market, the New Zealand dollar fell sharply on the currency market.

In the following comments from the RBNZ said that the central bank fears a further deterioration of the global economic outlook and the decline in inflation expectations in most of New Zealand.

Against the background of positive statistics on New Zealand, received yesterday, and today, the New Zealand dollar appreciated in the foreign exchange market. According to the presented data Tuesday, trust in the business community in New Zealand increased (Confidence in the business circles of New Zealand in May + 11.3% versus + 6.2% in April) in May, and its growth has been observed for the third month in a row. The growth of the index indicates an increase in business investment, which is conducive to production. Published today, the Bureau of Statistics New Zealand's terms of trade index, which reflects the ratio between exports and imports, has grown mainly due to the fall in import prices (+ 4.4% in the first quarter compared with the previous quarter), indicating that the increase in the balance surplus.

Inflation expectations in New Zealand with almost unchanged and amounted to 1.39% against 1.42% in May, in April.

Presented figures suggest that at the current stage of the New Zealand economy is not in need of further stimulation from monetary policy. Although the RBNZ is going to continue to adhere to a soft monetary policy, it is likely that during the meeting of June 9 Reserve Bank of New Zealand will keep the official interest rate at 2.25%. And this is a positive impact on quotations of the New Zealand dollar.

From the news today are waiting for US data, leaving at 13:45 and 14:00 (GMT), including PMI Markit index in the US manufacturing sector in May, ISM index of business activity in the US manufacturing sector in May, assessing the state of the industrial sector, gradual acceleration of inflation index from the ISM (an important indicator of the state of the US economy as a whole), construction spending in the US in April. In general, it expected growth rates, which will strengthen the US dollar in confirming forecasts, and vice versa.

In the period after 14:00 published price index for dairy products, prepared by the Global Dairy Trade, which is usually a strong effect on the New Zealand dollar quotes. With a decrease in world prices for dairy products pair NZD / USD lower. Volatility in the same period of time in the pair NZD / USD is expected to high.