NZD/USD: upward correction

Current trend

The pair continues corrective gains, trading near 0.6725.

Macroeconomic data from New Zealand, released this week, were neutral. Westpac Consumer Sentiment in Q3 2020 fell to 95.1 points from 97.2 points a quarter earlier. GDT Price Index increased by 3.6% after falling by 1.0% in the prior period. Net Debt Forecast was improved to 27.60% from 30.20%, and the Economic Forecast was improved to NZD –23.358B from NZD –28.293B, which should have a positive effect on the NZD rate.

The USD index reached over 93 points on the backdrop of positive data from the US. NY Empire State Manufacturing Index in September increased to 17 points against the background of the forecast of 6 points. Export Price Index in August rose to 0.5% against the projected 0.4%, while Import Price Index was 0.9% against the expected 0.5%.

Support and resistance

The formation of a rather wide global upward channel continues, within which the price is in the stage of an upward wave of the local corridor. The expectations regarding the transformation into a Head and Shoulders pattern have not yet been confirmed. Technical indicators reversed towards growth again. The range of EMA fluctuations on the Alligator indicator started to expand in the direction of growth, and the histogram of the AO oscillator is forming ascending bars in the positive zone.

Resistance levels: 0.6770, 0.6900.

Support levels: 0.6617, 0.6380.

Trading tips

If the asset continues growth and the price consolidates above 0.6770, short-term long positions with the target at 0.6900 will be relevant. Stop-loss – 0.6700.

If the asset continues to decline globally and the price consolidates below the support line of the global channel at 0.6617, short positions can be opened with the target at 0.6380. Stop-loss – 0.6670.

Implementation time: 7 days and more.