Current trend

The NZD/USD pair shows an attempt at a corrective decline, testing 0.6190 for a breakdown. The instrument managed to update local highs from June 22 the day before, reacting to a mixed news background and a decrease in trading activity in the US due to the celebration of Independence Day. At the same time, investors also drew attention to the decision of the Reserve Bank of Australia (RBA) to leave the interest rate at 4.10%, while most analysts expected 4.35%.

In turn, macroeconomic statistics from New Zealand, published the day before, did not support the instrument. The NZIER Business Confidence in the second quarter corrected from -66.0% to -63.0%, which still indicates a crisis in business sentiment. GDT Price Index, which makes up a significant part of the country's export items, was -3.3% in June after 0.0% in the previous month. In turn, the ANZ Commodity Price in June fell by 2.3% after 0.3% in May, and the Caixin Services PMI in June fell sharply from 57.1 points to 53.9 points, which turned out to be significantly worse than the average forecasts of analysts.

Markets are awaiting the publication of the minutes of the last meeting of the US Federal Reserve, which hope to see signals for the expected tightening of monetary policy. At the moment, about 87.0% of analysts expect a 25 basis point increase in the interest rate to 5.50%.

Support and resistance

Bollinger Bands in D1 chart demonstrate flat dynamics. The price range is narrowing, pointing at the multidirectional nature of trading in the short term. MACD indicator is growing preserving a stable buy signal (located above the signal line). The indicator is also trying to consolidate above the zero level. Stochastic keeps its upward direction but is approaching its highs, which reflects the risks of overbought instrument in the ultra-short term.

Resistance levels: 0.6211, 0.6250, 0.6303, 0.6350.

Support levels: 0.6183, 0.6155, 0.6132, 0.6100.

Trading tips

Long positions can be opened after a breakout of 0.6211 with the target of 0.6303. Stop-loss — 0.6170. Implementation time: 2-3 days.

A rebound from 0.6211 as from resistance, followed by a breakdown of 0.6155 may become a signal for opening of new short positions with the target at 0.6050. Stop-loss — 0.6200.