On Tuesday, the pair NZD/USD had reached the lows since March at the level of 0.7327, and after that the pair started correction. The rise in price was not stopped even after the statement by Graeme Wheeler, the head of the Reserve bank of New Zealand, who said that that the national currency rate is unreasonably overvalued.
Today, the pair continues to rise. Market participants are waiting for the data on retail sales in the USA for April. It is expected that the index will fall from 0.9% to 0.2%, which will trigger further rise in the pair.
Support and resistance
From the technical point of view the price has broken down important resistance levels of 0.7400 (middle line of Bollinger bands) and 0.7425 (Fibonacci retracement of 23.6%). Therefore, the main target of the “bulls” is 0.7485 (Fibonacci retracement of 38.2%; the upper line of Bollinger bands). At the level of 0.7485 the price can reverse and resume downward movement.
Technical indicators show that the rise in price will continue. MACD histogram is in the negative zone; its volumes are decreasing. Stochastic lines are directed upwards.
Support levels: 0.7425, 0.7400 and 0.7330.
Resistance levels: 0.7485, 0.7530 and 0.7580.
In the current situation it makes sense to open long positions w at the current price with the target of 0.7485. Pending sell orders with the targets of 0.7400 and 0.7330.can be placed at the level of 0.7485.