Current trend

The NZD/USD pair is correcting downwards at 0.6122 on the background of positive dynamics of the US dollar and neutral statistics from New Zealand.

The report of the State Statistical Agency (Stats NZ) recorded only a 0.2% increase in food prices in 12 months, which turned out to be the lowest since September 2018. Fruits and vegetables fell the most (˗11.4%), as well as meat and fish (˗1.2%), while a negative trend was observed in the categories of restaurant dishes ( 4.8%), food products ( 1.3%), and soft drinks ( 2.7%). By the end of the year, analysts expect to see negative dynamics, which is what the Reserve Bank of New Zealand (RBNZ) is trying to achieve by keeping interest rates at peak levels for a long time.

The US dollar is correcting upwards and is holding around 105.5 points in the USDX in today's trading. The growth of the instrument is due to the fact that the US Federal Reserve seems to have managed to convince investors of the correctness of a long-term "hawkish" course. According to research from the University of Michigan, the expected inflation in June was 3.3%, as it was a month earlier, and the consumer expectation index fell from 68.8 points to 67.6 points. At the same time, the consumer sentiment index adjusted from 69.1 points to 65.6 points, and the indicator of current conditions – from 69.6 points to 62.5 points.

Support and resistance

Quotes are adjusting while approaching the support line of the ascending channel with the boundaries of 0.6240–0.6100.

Technical indicators hold the buy signal, which has been slowing down for a long time: fast EMAs on the Alligator indicator are consolidated above the signal line and are approaching it, while the AO histogram, being above the transition level, forms new correction bars.

Support levels: 0.6100, 0.6037.

Resistance levels: 0.6150, 0.6220.

Trading tips

If the asset continues to decline and the price consolidates below the support level of 0.6100, one can open short positions with the target of 0.6037 and stop-loss of 0.6150. Implementation time: 7 days and more.

In case of continued growth and consolidation of the price above the resistance level of 0.6150, one may open long positions with the target of 0.6220 and stop-loss of 0.6120.