NZD/USD: instrument remains under pressure 14 July 2022, 11:39

 

NZD/USD: instrument remains under pressure

14 July 2022, 11:39

Scenario
Timeframe	Intraday
Recommendation	SELL STOP
Entry Point	0.6070
Take Profit	0.6000
Stop Loss	0.6120
Key Levels	0.5960, 0.6000, 0.6040, 0.6079, 0.6146, 0.6200, 0.6253, 0.6300

Alternative scenario
Recommendation	BUY STOP
Entry Point	0.6150
Take Profit	0.6253
Stop Loss	0.6100
Key Levels	0.5960, 0.6000, 0.6040, 0.6079, 0.6146, 0.6200, 0.6253, 0.6300

Current trend

During the Asian session, the NZD/USD pair shows ambiguous trading dynamics, consolidating near 0.6110.

Yesterday, the trading instrument tried to grow actively, supported by the expected decision of the Reserve Bank of New Zealand (RBNZ) to raise the interest rate by 50 basis points. However, with the publication of US statistics on consumer prices, market participants again rushed to purchase the US dollar, expecting a tightening of monetary policy: the market is discussing the possibility of raising rates by 100 basis points. The inflation in the US hit a new 40-year high at 9.1% YoY, while analysts expected acceleration from only 8.6% to 8.8%, and the figure rose from 1.0% to 1.3 % MoM, beating market forecasts by 1.1%.

The regulator of New Zealand noted that soon, there are risks of further inflation growth, which could negatively affect the economic situation in the country as a whole. Still, according to current estimates, it is 6.9%, the highest value over the past 30 years. Until the end of the year, the agency plans to raise the rate by another 1% to 3.5%, and by 2024 the figure may reach 4% or more if the situation requires it.

Support and resistance

On the daily chart, Bollinger Bands are steadily declining. The price range is narrowing, reflecting the emergence of ambiguous trading dynamics in the short term. The MACD indicator is growing, trying to form a poor buy signal (the histogram tends to consolidate above the signal line). Stochastic is showing similar dynamics, retreating from its lows, which reflected that the New Zealand dollar might become oversold in the ultra-short term.

Resistance levels: 0.6146, 0.6200, 0.6253, 0.6300.

Support levels: 0.6079, 0.6040, 0.6000, 0.5960.

Trading tips

Short positions may be opened after the breakdown of 0.6079, with the target at 0.6000. Stop loss – 0.6120. Implementation period: 2–3 days.

Long positions may be opened after the breakout of the level 0.6146 with the target at 0.6253. Stop loss – 0.6100.