Yesterday the pair showed high volatility but closed at opening levels. However, today the pair started falling despite the publication of quite strong macroeconomic data in New Zealand, where the GDP for the third quarter of the year grew by 0.9%, against a 0.3% growth in the previous quarter.
The pair is under pressure from yesterday’s Fed Interest Rate Decision. As expected, the regulator increased the interest rate from 0.25% to 0.5%. At the same time, Fed Chair Janet Yellen pointed out that monetary policy is going to remain loose for a prolonged time.
Support and resistance
Bollinger Bands on the daily chart is moving up while the price range is narrowing. MACD is turning down having formed a sell signal. Stochastic bounced off the overbought zone and falling.
The indicators recommend short positions.
Support levels: 0.6724 (local low), 0.6690, 0.6660, 0.6600 (9 December lows), 0.6560, 0.6534, 0.6500, 0.6457, 0.6428 (18 November low), 0.6400.
Resistance levels: 0.6787 (local high), 0.6835 (local high), 0.6865, 0.6900, 0.6926 (June highs).
Short positions can be opened after the breakdown of the level of 0.6690 with targets at 0.6640, 0.6600 and stop-loss at 0.6720. Validity – 2-3 days.
Long positions can be opened after the breakout of the level of 0.6760 (with the appropriate indicators signals) with targets at 0.6800, 0.6835 and stop-loss at 0.6730. Validity – 2-3 days.