On Monday, the US Dollar is strengthening, against the NZ Dollar as well.
ANZ Commodity Price, released on Friday in New Zealand, fell by 5.6% in November after a 7.1% growth in October. This data is considered as an early indicator of export price changes; therefore, as long as New Zealand has an export-oriented economy, ANZ Commodity Price directly influences exchange rates of the NZD.
Graeme Wheeler, Governor of RBNZ, has repeatedly stated a possibility of another interest rate cut. Amid a decline in commodity prices, which reduces export earnings, New Zealand needs a cheaper national currency.
Support and resistance
Since the beginning of the month, the NZD/USD pair has managed to strengthen to the resistance level of 0.6750, but today the pair has fallen sharply.
On the 4-hour chart, OsMA and Stochastic are giving sell signals. On the daily chart, the indicators are turning to short positions as well.
A downward trend will resume when the price consolidates below the level of 0.6600, which corresponds to EMA50 on the daily chart and EMA144, EMA200 on the 4-hour chart. Therefore, an upward correction will finish when the price breaks down of the lower border of an upward channel on the daily chart, near the levels of 0.6465, 0.6530.
Support levels: 0.6530, 0.6500, 0.6465, 0.6435, 0.6400.
Resistance levels: 0.6700, 0.6750 (EMA144 on the daily chart), 0.6800, 0.6860 (23.6% Fibonacci), 0.6890 (EMA200 on the daily chart).
Short positions seem preferable and can be opened at the current level with the target at 0.6610 and stop-loss at 0.6685.
Long positions can be opened if the price turns up and reaches the level of 0.6700 with the target at 0.6750 and stop-loss at 0.6670.