NZD/USD: HIGH PROBABILITY OF STRENGTHENING DOWNWARD MOVEMENT
| Scenario | |
|---|---|
| Timeframe | Weekly |
| Recommendation | SELL LIMIT |
| Entry Point | 0.5946 |
| Take Profit | 0.5865 |
| Stop Loss | 0.5970 |
| Key Levels | 0.5789, 0.5865, 0.5946, 0.6005, 0.6069 |
| Alternative scenario | |
|---|---|
| Recommendation | BUY STOP |
| Entry Point | 0.5975 |
| Take Profit | 0.6069 |
| Stop Loss | 0.5934 |
| Key Levels | 0.5789, 0.5865, 0.5946, 0.6005, 0.6069 |
Current trend
The NZD/USD pair broke through the support level of 0.5946 and headed towards 0.5865 against the strengthening of the American dollar against all major competitors after the publication of strong macroeconomic statistics.
Thus, the March retail sales in the United States increased by 1.1% MoM, above estimates of 0.4%, and by 0.7% compared to expectations of 0.4% YoY. The Federal Reserve Bank of Atlanta’s forecast for Q1 gross domestic product (GDP) growth was 2.8%, higher than analysts’ preliminary estimates of 2.4%. The data reflects the strength of the nation’s economy and could allow US Federal Reserve officials to keep interest rates high for longer.
On Wednesday at 00:45 (GMT 2), traders will pay attention to the publication of the Q1 New Zealand consumer price index. Experts suggest the figure will be 0.6% QoQ, so the New Zealand dollar may grow to the resistance level of 0.5946. Otherwise, the NZD/USD pair will continue to decline towards the support level of 0.5865, after breaking through which it may reach 0.5789.
Support and resistance
The long-term trend is downward: yesterday, the price consolidated below 0.5946, allowing it to reach 0.5865, after which the next target will be 0.5789. For the quotes to grow, the price should overcome the resistance level of 0.5946, after which long positions with the target at 0.6005 are relevant.
The medium-term downward trend continues, and within its framework, the asset crossed zone 3 (0.5949–0.5935) and headed towards zone 4 (0.5809–0.5795). If, within the correction, the trading instrument tests the trend border of 0.6027–0.6013, short positions with the target at the current week’s low of 0.5877 are relevant.
Resistance levels: 0.5946, 0.6005, 0.6069.
Support levels: 0.5865, 0.5789.
Trading tips
Short positions may be opened from 0.5946, with the target at 0.5865 and stop loss 0.5970. Implementation time: 9–12 days.
Long positions may be opened above 0.5970, with the target at 0.6069 and stop loss 0.5934.
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