2016-07-19 12:46:40

Review and dynamics
Today, after the announcement that the RBNZ will soon toughen mortgage conditions, the pair NZD/USD fell by 90 points. On Thursday the RBNZ will present assessment of the current economic situation in the country. Some economists believe that the Bank is taking this measure in order to find grounds for lowering interest rate at the next meeting.

After reaching new annual highs at the level of 0.7320 (upper line of the ascending channel on the daily chart), the pair NZD/USD has been declining for a fifth consecutive session. The price has broken important support levels of 0.7290 (ЕМА144 on the weekly chart), 0.7240 (Fibonacci 38.2% to the decline of the pair from the level of 0.8800, since July 2014), 0.7100 (ЕМА200 on 4-hour chart) and 0.7045 (ЕМА50 on the daily chart).

Our opinion
The pair can continue to decline to support levels 0.6930 (ЕМА50 on the daily chart), 0.6895 (ЕМА200, ЕМА144 on the daily chart) and 0.6860 (Fibonacci 23.6%). Our previous review stated that in case of breakout of the level of 0.7100, the decline in the pair can continue. The pair has broken out important support levels and continued to decline. On the daily and 4-hour charts the indicators OsMA and Stochastic give sell signals. On the weekly and monthly charts the indicators also suggest to open short positions.

As an alternative scenario the pair can go up above support level of 0.7100 (ЕМА200 on 4-hour chart). However, increasing expectations of the reduction in the interest rate will encourage investors to open short positions.


Support levels: 0.7000, 0.6930, 0.6895 and 0.6860.
Resistance levels: 0.7045, 0.7100, 0.7130, 0.7200, 0.7240, 0.7290 and 0.7320.


Trading tips
Sell on the market. Stop-Loss: 0.7050. Take-Profit: 0.7000, 0.6930, 0.6900 and 0.6860.
Buy Stop: 0.7060. Stop-Loss: 0.7010. Take-Profit: 0.7100, 0.7130, 0.7200, 0.7240, 0.7290 and 0.7320.

Rebound from the upper line of the channel
Rebound from the upper line of the channel

If the price consolidates above the level of 0.7100, buy orders will be advisable
If the price consolidates above the level of 0.7100, buy orders will be advisable