Today, the NZD/USD pair has strengthened amid expectations of a rise in dairy products prices at the upcoming diary auction. Moreover, the pair gained support from Business Confidence statistics, which indicated a rise from 10.5 to 14.6 points in November.
New Zealand is the leading exporter of dairy products, thus, a decline in dairy products prices negatively affects the national currency.
While the Fed is getting ready for a hike in US interest rates, Governor of RBNZ Graeme Wheeler has repeatedly stated possibility of another cut in NZ interest rates. Therefore, the NZD/USD pair is under double pressure.
Support and resistance
If prices of dairy products fall, downward dynamics in the NZD/USD pair will resume. In the long term, the pair may decline back to its year lows at 0.6230.
OsMA and Stochastic on the 4-hour chart start giving buy signals that suggests possibility of a short-term upward correction towards 0.6575 (EMA200 on the 4-hour chart), 0.6750 (EMA144 on the daily chart) and 0.6860. On the daily and weekly charts, the indicators still recommend short positions.
Support levels: 0.6530, 0.6500, 0.6465, 0.6435, 0.6400.
Resistance levels: 0.6575, 0.6615, 0.6700, 0.6750.
Long positions can be opened after the breakout of the level of 0.6660 with the target at 0.6815 and stop-loss at 0.6620.
As an alternative, place pending sell orders at the level of 0.6500 with the target at 0.6380 and stop-loss at 0.6530.