Current trend

The NZD/USD pair is showing quite active growth, developing a confident "bullish" short-term trend from February 14. The instrument is testing 0.6200 for a breakout, updating local highs from January 16.

The development of upward dynamics is supported by the weakness of the US currency, which is under pressure after the publication of the minutes of the January meeting of the US Federal Reserve. Representatives of the Federal Open Market Committee (FOMC) expressed more concern about the remaining risks of a premature decline in borrowing costs than about a prolonged period of "hawkish" monetary policy. Against this background, markets are reconsidering the timing of a possible easing of the regulator's position in May and June: according to the Chicago Mercantile Exchange (CME Group) FedWatch Tool, the likelihood of a May adjustment of 25 basis points is currently estimated at only 35.0%.

The development of upward dynamics for the instrument was not prevented by weak macroeconomic statistics from New Zealand: Export volumes in January decreased from 5.85 billion dollars to 4.93 billion dollars, and Imports from 6.22 billion dollars to 5.91 billion dollars, which led to an increase in the Trade Balance deficit in monthly terms from –368.0 million dollars to –976.0 million dollars. In addition, today at 23:45 (GMT 2) in New Zealand, data on the dynamics of Retail Sales in the fourth quarter of 2023 will be presented.

Meanwhile, New Zealand Prime Minister Christopher Lacson expressed concern about the current state of the national economy, noting that government spending has increased by 84.0% over the past four years, and public debt has exceeded 100.0 billion New Zealand dollars. According to the official, the country's inflation rate exceeds that of Australia, the USA, Canada and Japan.

Support and resistance

Bollinger Bands on the daily chart show a steady increase. The price range is expanding from above but it fails to conform to the surge of "bullish" activity at the moment. MACD grows, preserving a stable buy signal (located above the signal line). The indicator is also trying to consolidate above the zero level. Stochastic, having approached its highs, is reversing into a horizontal plane, indicating the overbought instrument in the ultra-short term.

Resistance levels: 0.6200, 0.6221, 0.6250, 0.6300.

Support levels: 0.6158, 0.6130, 0.6100, 0.6060.

Trading tips

Long positions can be opened after a breakout of 0.6200 with the target of 0.6300. Stop-loss — 0.6158. Implementation time: 2-3 days.

A rebound from 0.6200 as from resistance, followed by a breakdown of 0.6158 may become a signal for opening of short positions with the target at 0.6100. Stop-loss — 0.6190.