NZD/USD: upward momentum maintains
05 February 2019, 13:30
| Scenario | |
|---|---|
| Timeframe | Weekly |
| Recommendation | BUY |
| Entry Point | 0.6892 |
| Take Profit | 0.6970, 0.7020 |
| Stop Loss | 0.6840 |
| Key Levels | 0.6630, 0.6705, 0.6705, 0.6760, 0.6810, 0.6850, 0.6870, 0.6900, 0.6950, 0.6970, 0.7020, 0.7045, 0.7110 |
Current trend
NZD is rising against USD.
At the end of January, the NZD/USD pair reached the lower limit of the medium-term upward channel at 0.6705, after which it proceeded to form a new upward wave. A short-term narrow upward channel is now forming.
USD continues to lose ground against all major competitors due to poor macroeconomic data and a delay for an indefinite time of further rate hike after a decline in the labor market statistic and inflation indicators. Despite keeping the interest rate from the RBNZ at the same level, the New Zealand currency tends to rise due to high inflation rates and a significant reduction in unemployment, however, the high rate of the national currency is not profitable for the regulator, which may limit its growth.
At the end of the week, it is worth noting to the Unemployment rate and Employment change releases in New Zealand. In the US, data on the trade balance, the labor market, and key indices will be published.
Support and resistance
In the short term, the upward momentum maintains, growth to 0.6970 and retest of new local highs at 0.7020 are possible. Within the long-term broad downtrend, the pair may increase to 0.7110 – the upper limit of this trend.
In the medium term, the rate stays within the ascending range. Technical indicators confirm the forecast of further growth, the volumes of long MACD positions grow, Bollinger bands are directed upwards.
Resistance levels: 0.6900, 0.6950, 0.6970, 0.7020, 0.7045, 0.7110.
Support levels: 0.6870, 0.6850, 0.6810, 0.6760, 0.6725, 0.6705, 0.6630.
Trading tips
It is relevant to increase the volumes of long positions from the current level with the targets at 0.6970, 0.7020 and stop loss 0.6840.
NZD is rising against USD.
At the end of January, the NZD/USD pair reached the lower limit of the medium-term upward channel at 0.6705, after which it proceeded to form a new upward wave. A short-term narrow upward channel is now forming.
USD continues to lose ground against all major competitors due to poor macroeconomic data and a delay for an indefinite time of further rate hike after a decline in the labor market statistic and inflation indicators. Despite keeping the interest rate from the RBNZ at the same level, the New Zealand currency tends to rise due to high inflation rates and a significant reduction in unemployment, however, the high rate of the national currency is not profitable for the regulator, which may limit its growth.
At the end of the week, it is worth noting to the Unemployment rate and Employment change releases in New Zealand. In the US, data on the trade balance, the labor market, and key indices will be published.
Support and resistance
In the short term, the upward momentum maintains, growth to 0.6970 and retest of new local highs at 0.7020 are possible. Within the long-term broad downtrend, the pair may increase to 0.7110 – the upper limit of this trend.
In the medium term, the rate stays within the ascending range. Technical indicators confirm the forecast of further growth, the volumes of long MACD positions grow, Bollinger bands are directed upwards.
Resistance levels: 0.6900, 0.6950, 0.6970, 0.7020, 0.7045, 0.7110.
Support levels: 0.6870, 0.6850, 0.6810, 0.6760, 0.6725, 0.6705, 0.6630.
Trading tips
It is relevant to increase the volumes of long positions from the current level with the targets at 0.6970, 0.7020 and stop loss 0.6840.
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