NZD/USD: Trader’s activity is low _25.08.2016

Trading recommendations

Sell ​​Stop 0.7270. Stop-Loss 0.7310. Take-Profit 0.7240, 0.7115, 0.7100, 0.7085, 0.6975, 0.6900, 0.6860

Buy Stop 0.7350. Stop-Loss 0.7280. Take-Profit 0.7380, 0.7420, 0.7500, 0.7550


Technical analysis

The pair NZD / USD remains in ascending channel on the weekly chart and almost reached the key resistance level of 0.7380 (EMA200 and the upper boundary of the rising channel on the weekly chart). This strong support is at 0.7290 levels (EMA144 on the weekly chart) and 0.7240 (38.2% Fibonacci level of upward correction to the global wave of decrease in pair with the level of 0.8800, which began in July 2014, EMA144 on the monthly chart).

If the pair breaks through the level of 0.7380, it is likely to further growth that would signal the end of a downward correction and return to the global upward trend (in monthly scale) level of resistance 0.7550 (50.0% Fibonacci level). However, this forecast only in the framework of technical analysis.

Fundamental factors are the same (different directions of monetary policy the Fed and RBNZ, subject to its gain in the near future) can radically change the technical picture and cancel the further growth of the pair NZD / USD.

OsMA and Stochastic indicators on higher timeframes (daily, weekly, monthly) are on the side of buyers.

On indicators were developed for short positions the 4-hour chart. Possible is correction to the support levels 0.7240 (38.2% Fibonacci level), 0.7200 (EMA200 on 4-hour chart).

It also passes the lower line of the rising channel on 4-hour chart. Deeper correction within an uptrend is acceptable to the support level 0.6975 (EMA200, the lower boundary of the rising channel on the daily and weekly charts). But the breakdown of the level 0.6860 (23.6% Fibonacci level) may cancel the uptrend.

Support levels: 0.7290, 0.7240, 0.7200, 0.7115, 0.7085, 0.7050, 0.6975, 0.6930, 0.6900, 0.6860

Resistance levels: 0.7380, 0.7420, 0.7550


Overview and Dynamics

The New Zealand dollar reacted with restraint to the data on trade balance, published earlier in the week. The trade balance in New Zealand in July was negative (-0.433 billion NZ $, -3.03 billion New Zealand dollars in annual terms). The volume of exports and imports in July were lower than forecast. The export of meat products has fallen dramatically.

Other data from New Zealand this week is expected. All attention will be focused on the symposium in Jackson Hole speech on Fed chief Janet Yellen.

Prior to the scheduled for Friday speech Fed Chairman Janet Yellen at a symposium in Jackson Hole, the US dollar today, trading in a narrow range against most of the currencies of competitors. the WSJ dollar index, which reflects the value of the US dollar against a basket of 16 currencies, fell 0.02% to 85.83.

Trading activity is low, traders generally adjust their positions.

From Yellen waiting signals about the possible timing of interest rate rises in the United States. However, most likely, Yellen will deliver general words about the current situation in the economy. It is unlikely that Janet Yellen will indicate the interest rate increase in September, but again declare that the rise in US interest rates this year is still possible. Nevertheless, surprises are possible, so from Yellen speech depend the dollar in the foreign exchange market.

Pre-performing Yellen is scheduled for 14:00 (GMT) on Friday. In anticipation of possible performances multidirectional movements of currencies in narrow ranges.

Many economists expect that after the Jackson Hole US currency will weaken again. The US dollar strengthened on the foreign exchange market only in one case - if D.Yellen hints at the possibility of a rate hike in September.

Предварительно время выступления Йеллен назначено на 14:00 (GMT) в пятницу. В ожидании выступления возможны разнонаправленные движения валют в узких диапазонах.

Многие экономисты ожидают, что после Джексон-Хоул американская валюта опять будет ослабевать.  Доллар США укрепится на валютном рынке только в одном случае - если от Д.Йеллен последует намек на возможность повышения ставки в сентябре.