European session on Tuesday started with the sharp decline in the USD. The pair EUR/USD gave a lead as its volatility exceeded 120 points. The pair NZD/USD rose during the Pacific session due to the increase in inflation expectations in New Zealand from 1.80% to 1.85% in Q2. NZD has strengthened against the other currencies. However, later at the European session the NZD started to lose positions versus the USD.
It is likely that the rise in the pair will be temporary. Taking into account poor data on the labour market in New Zealand, interest rates can be reduced in September or October. However, until the US Fed announces their interest rates plans, the pair will probably move in the upward channel marked green on the daily chart between the levels of 0.7330 and 0.7780. Breakdown below the level of 0.7330 will enable the pair to go to 0.7260 and 0.7100.
Support and resistance
The pair is still in the downward daily trend far below the moving average lines ЕМА200 and ЕМА144, trying to reach Fibonacci 0% at the level of 0.7250. However, it is worth paying attention to OsMA and Stochastic on the four-hour chart, as they contradict to the general downward movement in the pair, giving the signals of upward correction.
Support levels: 0.7450, 0.7500, 0.7560, 0.7585 and 0.7625.
Resistance levels: 0.7330 and 0.7300.
As soon as the upward signal completed, it makes sense to return to the short positions. It is recommended to place pending limit orders to sell from the level 0.7450 and 0.7500 with the targets of 0.7400, 0.7330 and 0.7260. Alternative scenario: open buy positions is the pair goes above the level of 0.7625 (23.6% Fibonacci) with the target of 0.7850 (38.32% Fibonacci).