Towards the end of the week, the pair substantially grew.
The pair was unexpectedly supported by the RBNZ decision on interest rates made on Wednesday. As was forecasted, the rate was cut by 25 basis points to 2.5% that caused a sharp growth in the pair. At the same time, in accompanying Rate Statement it was pointed out that rates could be reduced again if required. The regulator noted that strong national currency currently hampers the economic growth and it is interested in its further weakening.
Support and resistance
Bollinger Bands on the daily chart is moving up while the price range shows almost no change. MACD is growing and giving a weak buy signal. Stochastic is quickly approaching the overbought zone substantially limiting the growth potential in the pair.
The indicators recommend waiting for clearer trading signals.
Support levels: 0.6724 (local low), 0.6687, 0.6660, 0.6600 (9 December lows), 0.6560, 0.6534, 0.6500, 0.6457, 0.6428 (18 November low), 0.6400.
Resistance levels: 0.6791 (30 October high), 0.6812 (27 October high), 0.6865 (23 October high), 0.6900.
Long positions can be opened after the breakout of the level of 0.6790 with targets at 0.6850, 0.6900 and stop-loss at 0.6760. Validity – 2-3 days.
Short positions can be opened after the breakdown of the level of 0.6735 with targets at 0.6680, 0.6630 and stop-loss at 0.6750. Validity – 2-3 days.