NZD/USD: New Zealand dollar remains under pressure

Current trend

NZD declines slightly during today’s Asian session, developing a weak “bearish” momentum formed at the beginning of the current trading week. Investors hesitate amid the publication of mixed macroeconomic statistics and expect new drivers to appear. The data from New Zealand published yesterday were controversial. NZIER Business Confidence index in Q4 2019 decreased by 21% QoQ after falling by 40% QoQ in Q3. The number of Building Permits issued in November decreased sharply by 8.5% MoM after a 1.3% MoM decrease in the previous month. Analysts counted on the appearance of positive dynamics (+2.1% MoM). Food Price Index in December also showed a decrease of 0.2% MoM, continuing to develop the negative dynamics of the previous month (–0.7% MoM). Experts counted on zero growth.

Support and resistance

On the D1 chart, the Bollinger Bands are gradually reversing into a horizontal plane. The price range expands, making way to new local lows for the “bears”. MACD is declining keeping a relatively weak sell signal (located below the signal line). Stochastic, after a short growth at the end of the last trading week, again reverses downwards, reacting to the resumption of decline in the ultra-short term.

Technical indicators do not contradict the further development of the downtrend in the short and/or ultra-short term.

Resistance levels: 0.6618, 0.6651, 0.6680, 0.6725.

Support levels: 0.6600, 0.6573, 0.6539, 0.6521.

Trading tips

To open long positions, one can rely on the rebound from the support level of 0.6600, with the subsequent breakout of the 0.6618. Take profit – 0.6680. Stop loss – 0.6580.

A breakdown of 0.6600 may be a signal for new sales with target at 0.6539 or 0.6521. Stop loss – 0.6630 or 0.6640.

Implementation time: 2-3 days.

Scenario

  • Timeframe

    Intraday

  • Recommendation

    BUY STOP

  • Entry Point

    0.6620

  • Take Profit

    0.6680

  • Stop Loss

    0.6580

  • Key Levels

    0.6521, 0.6539, 0.6573, 0.6600, 0.6618, 0.6651, 0.6680, 0.6725

Alternative scenario

  • Timeframe

    Intraday

  • Recommendation

    SELL STOP

  • Entry Point

    0.6595

  • Take Profit

    0.6539, 0.6521

  • Stop Loss

    0.6630, 0.6640

  • Key Levels

    0.6521, 0.6539, 0.6573, 0.6600, 0.6618, 0.6651, 0.6680, 0.6725

Tifia trading account

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NZD/USD analysis for today.