Due to last week’s statement made by Janet Yellen about the plan of the gradual increase in the interest rate in the USA, the USD fell all over the market. However, last Friday after strong US data on the labor market, business activity index in the manufacturing sector, gradual acceleration in inflation and consumer confidence index for March, the pair NZD/USD has regained most part of the losses.
On Monday the price fell below the level of 0.6860 (Fibonacci 23.6% to the decline in the pair from 0.8800, which started in July 2014). Earlier the price rebounded three times from this level in October, December 2015 and in mid-March 2016.
In the previous review we suggested that in case of strong US data the pair NZD/USD might return below the level of 0.6860, and go down to 0.6770 (ЕМА200), 0.6700 (ЕМА144), 0.6650 (lower line of the ascending channel on the daily chart)”.
Our forecast and recommendations were: (Sell Stop 0.6870. Stop-Loss 0.6910. Take-Profit 0.6800, 0.6770, 0.6700, 0.6650) have confirmed to be correct, as 2 out of 4 targets have been reached. In case of consolidation of the price below the level of 0.6770 (ЕМА200), the pair NZD/USD may continue to decline with the nearest target of 0.6700 and 0.6650.
On the daily and 4-hour chart the indicators OsMA and Stochastic recommend to open short positions. On the weekly chart the indicators also support sellers and the price is near the upper limit of the descending channel with the lower limit at the level of 0.6260 (lows of 2015).
As an alternative scenario the price can go above the level of 0.6860 in the ascending channel on the daily chart with the upper limit at the level of 0.7000. In this case the pair will continue to rise up to 0.7240 (Fibonacci 38.2%). However, the indicators and fundamental data are in favor of the sellers.
Support levels: 0.6770, 0.6700 and 0.6650.
Resistance levels: 0.6860, 0.6900 and 0.6965.
Sell Stop 0.6750. Stop-Loss 0.6790. Take-Profit 0.6700, 0.6650, 0.6610.
Buy Stop 0.6820. Stop-Loss 0.6760. Take-Profit 0.6860, 0.6900, 0.6965, 0.7000, 0.7100, 0.7240.