Review and dynamics
Since last September the pair NZD/USD has been in the ascending channel with the upper limit at the level of 0.7380 (ЕМА200 on the weekly chart).
By mid-July the pair has reached the level of 0.7300, which is close to the resistance level and the line ЕМА144 on the weekly chart.
The pair NZD/USD has regained the losses and reached Fibonacci level of 38.2% after the wave of decline from the level of 0.8800 since July 2014.
Last week, the RBNZ presented new economic forecast and RBNZ Governor and Mr. Graeme Wheeler said that more monetary policy easing would be required in the country. These two facts caused sharp decline in the NZD in the currency market. The pair NZD/USD fell to the support level of 0.6975 (the lower line of the ascending channel on the daily chart).
Today, the pair NZD/USD rose by 100 points up to resistance level of 0.7075 (ЕМА200 on 4-hour chart).
If the pair consolidates above the level of 0.7100, upward correction can continue up to 0.7240 (Fibonacci 38.2%).
Otherwise, the pair may break down support level of 0.6975 and continue to decline to 0.6895 and 0.6860. If the price breaks down the level of 0.6860, the pair NZD/USD may go back to the downtrend.
On 4-hour and daily charts the indicators OsMA and Stochastic give buy signals, while the indicators on the weekly chart suggest to open sell positions.
Judging by the fundamental factors the pair NZD/USD is likely to decline in the medium-term. Despite today’s rise, the pair is unlikely to exceed the level of 0.7100.
Support levels: 0.6975, 0.6895 and 0.6860.
Resistance levels: 0.7100, 0.7130, 0.7200, 0.7240, 0.7290 and 0.7320.
Sell Stop: 0.7050. Stop-Loss: 0.7110. Take-Profit: 0.6975, 0.6900, 0.6860 and 0.6800.
Buy Stop: 0.7130. Stop-Loss: 0.7080. Take-Profit: 0.7200, 0.7240, 0.7290 and 0.7320.
In the ascending channel
Breakout of the level of 0.6975 will trigger the decline in the pair