Current trend

This week, the NZD/USD pair has been growing, recovering losses incurred earlier after the Reserve Bank of New Zealand (RBNZ) kept the interest rate at 5.50%.

The US currency is under pressure after comments by the head of the US Federal Reserve Jerome Powell, who yesterday, speaking in Congress, confirmed that it would be advisable to start reducing the key rate later this year and only if officials receive new evidence of a stable decline in inflation to the target level of 2.0%. In the meantime, according to Powell, further progress in slowing consumer price growth is not at all guaranteed.

Nevertheless, investors remained confident that monetary policy easing will begin very soon, however, these sentiments may change on Friday after the publication of February data on the US labor market: if it demonstrates its strength again, employment will grow significantly, and the unemployment rate, on the contrary, will decrease, US Federal Reserve officials will get more arguments in the benefit of maintaining the cost of borrowing at current high levels for a long time, and the US dollar will be able to resume its upward momentum.

Support and resistance

Technically, the price has risen above the central line of Bollinger Bands and is now close to 0.6164 (Murrey level [5/8]), the breakout of which will allow quotes to continue growing towards the targets 0.6225 (Murrey level [6/8], 23.6% Fibonacci retracement), 0.6286 (Murrey level [7/8]) and 0.6347 (Murrey level [8/8], the area of December highs). The key for the "bears" is the support zone of 0.6103–0.6075 (Murrey level [4/8], 50.0% Fibonacci retracement), with consolidation below which the decline can continue to 0.5981 (Murrey level [2/8]) and 0.5920 (Murray level [1/8]).

Technical indicators allow for increased growth: Bollinger Bands are horizontal, but Stochastic is pointing upwards, and MACD is preparing to move into a positive zone.

Resistance levels: 0.6164, 0.6225, 0.6286, 0.6347.

Support levels: 0.6075, 0.5981, 0.5920.

Trading tips

Long positions can be opened above 0.6164 with targets of 0.6225, 0.6286, 0.6347 and stop-loss of 0.6125. Implementation period: 5–7 days.

Short positions can be opened below the 0.6075 mark with targets of 0.5981, 0.5920 and stop-loss of 0.6110.