2016-10-18 12:36:04

Review and dynamics
Last week, the pair NZD/USD fell to the key support level of 0.7045 (ЕМА200 on the daily chart), due to strong US macro-economic data. The lower line of the ascending channel on the daily chart crosses the level of 0.7045. Since the beginning of this week the pair NZD/USD has been growing due to the take profit on the USD long positions. New Zealand’s positive data received this morning (consumer price index in Q3 has increased by 0.2% against the forecast of +0.0%), has added upward impetus in the pair.

The pair NZD/USD remains in the ascending channel on the weekly chart with the upper limit above the resistance level of 0.7550 (Fibonacci 50.0% after the decline from the level of 0.8800 since July 2014).

Earlier in August the pair NZD/USD failed to exceed resistance level of 0.7380 (ЕМА200 on the weekly chart). Correction to support level of 0.7045 amounted to 5.7% or 400 points.

Our opinion
On the daily and 4 -hour charts the indicators OsMA and Stochastic give buy signals. The pair NZD/USD has closely approached resistance level of 0.7200 (ЕМА200 on 4-hour chart). In case of breakdown of this level, next target will at the resistance level at 0.7240 (Fibonacci 38.2%). If the price consolidates above this level, long positions with the target of 0.7380 (ЕМА200 on the weekly chart) will be possible.

The breakout of the resistance level of 0.7380 may trigger further rise in the pair in the ascending channel on the weekly chart.

As long as the pair NZD/USD is above support level of 0.7045, uptrend will continue.

However, due to the differences in the monetary policies of the RBNZ and the US Fed, short positions are preferable in the short-term.

Downward movement in the pair is possible in case of consolidation of the pair NZD/USD below support level of 0.7045. Breakdown of this key support level may trigger further decline to support level of 0.6860 (Fibonacci 23.6%).

Support levels: 0.7085, 0.7045, 0.6975, 0.6930, 0.6900 and 0.6860.
Resistance levels: 0.7200, 0.7240, 0.7275, 0.7380 and 0.7485.

Trading tips
Sell on the market. Stop-Loss: 0.7220. Take-Profit: 0.7085, 0.7045, 0.6975, 0.6930, 0.6900 and 0.6860.
Buy Stop: 0.7220. Stop-Los: 0.7080. Take-Profit: 0.7240, 0.7275, 0.7380 and 0.7485

In the ascending channel
In the ascending channel

Rebound from support level of 0.7045
Rebound from support level of 0.7045