The NZD/USD rate grew slightly on Monday due to the dollar's general weakening against a basket of major currencies. However, the general trend remains descending: last week, the pair dropped to a level of 0.7022 for the first time since 2010, and yesterday's growth seems to be a slight correction before a further decline. The data on NZ industrial sector in the first quarter released this morning equal –0.3%, and the previous value has been downgraded from 0.9% to 0.6%. Even if this indicator is not key for New Zealand's currency, the pair resumed dropping after the publication and is currently trading at 0.7117.
This week, the key event in the market will be RBNZ press conference (Thursday, 00:00 GMT +3), at which both a decision concerning interest rates and a quarterly comment on the monetary policy will be voiced. The current interest rate amounts to 3.5%. The increase of this indicator will provide the NZD with necessary suppot.
Support and resistance
On the daily chart, 10 and 20 MA are below the price chart and directed downwards, which also confirms a downward trend. The MACD histogram is in the negative zone, which also indicates a negative trend. The support levels are at 0.7085 (last week's minimum) and 0.7022 (lowest value since 2010). The resistance levels are at 0.7184, 0.7272, 0.7313, 0.7564 (last month's peaks), 0.7743 (highest value since this January).
The current situation implies opening short positions with a target at 0.7022-0.7000 and protective order at 0.7184 once the price has consolidated below 0.7085. An alternative scenario may be realized when the level of 0.7184 is broken. Bulls' target will be a level of 0.7272 with Stop Loss at 0.7085.