Current trend

Amid unstable dynamics of the American currency, the NZD/USD pair is moderately increasing near the level of 0.6215.

The New Zealand currency is still not able to determine the dynamics of the asset independently and mostly reacts to fluctuations in the American dollar. The Q2 gross domestic product (GDP) decreased from 0.1% to –0.2%, better than expectations of –0.4%, while the per capita indicator changed from 0.5% to –0.5%, meeting forecasts. However, seven out of sixteen sectors of the economy accelerated, with manufacturing leading the way. Household spending added 0.4% due to increased demand for non-durable goods, including food, moving to a positive trend.

The American dollar is holding at 100.70 in USDX, as most experts expected the US Fed’s decision to cut the interest rate by 50 basis points to 4.75–5.00%, although the central forecast assumed an adjustment of –25 basis points. The regulator’s officials relied on the recovery of the labor and real estate markets. The housing starts increased for the first time since the beginning of the year from 1.237M to 1.356M, and the building permits number – from 1.406M to 1.475, significantly exceeding preliminary estimates, which will contribute to economic growth after the easing of the debt burden.

Support and resistance

The trading instrument is correcting, trying to consolidate above the resistance line of the downward channel 0.6180–0.6100. Technical indicators maintain a buy signal: fast EMAs on the Alligator indicator are moving away from the signal line, and the AO histogram is forming ascending bars above the transition level.

Resistance levels: 0.6250, 0.6340.

Support levels: 0.6180, 0.6100.

Trading tips

Long positions may be opened after the price rises and consolidates above 0.6250, with the target at 0.6340. Stop loss is 0.6200. Implementation period: 7 days or more.

Short positions may be opened after the price falls and consolidates below 0.6180, with the target at 0.6100. Stop loss is 0.6220.