At the last meeting of the Reserve Bank of New Zealand on Thursday the interest rate was lowered by 25 basis points to the level of 3.5%. The governor of the Bank Graeme Wheeler said that probability of the further easing of the monetary policy would depend on the economic situation in New Zealand. Amid this news the pair NZD/USD has lost over 200 points and the closing price of the pair was at the level of 0.7011.
Today, the pair continues to decline. Pressure was added by the fact that RBNZ has downgraded the forecast for the pair from 0.6800 to 0.7000 by the end of 2015.
US data on producer price index for May will be released at 17:00 (GMT+3) and consumer price index Reuters/Michigan for June. These indices can increase volatility in the pair with the USD, including the pair NZD/USD.
Support and resistance
The pair has been moving in the downtrend since July 2014 and at the moment it is traded at 0.7000, which is the lowest level since June 2009. The pair has broken the strong resistance level of 0.7110 (ЕМА200 on the monthly chart).
On the daily and four-hour charts the indicators OsMA and Stochastic give sell signals.
Support levels: 0.6930 and 0.6850.
Resistance levels: 0.7050, 0.7090, 0.7110, 0.7185, 0.7200, 0.7220, 0.7275 and 0.7300.
It is advisable to open short positions from the levels of 0 .7045, 0.7085, 0.7155, 0.7185 and 0.7220 with the target of 0.6800. Alternative scenario is possible after breakdown of the level of 0.7300 with the targets of 0.7450 and 0.7540.