At the beginning of today's European session, the NZD/USD pair is trading near the 0.6225 mark. The fundamental background creates the prerequisites for a further decline in this currency pair. RBNZ executives are prone to further easing monetary policy.
“The U.S.-China trade conflict is affecting international trade flows and investments, as companies scale up spending plans in the face of heightened uncertainty”, said RBA manager Philip Lowe after Australia's central bank cut interest rates today by 0,25%.
Earlier in August, the RBNZ also lowered the rate, at once by 50 bp, to 1.00%, explaining this decision by the aggravation of the trade war between the United States and China and the loss of momentum in the New Zealand economy. The New Zealand currency remains vulnerable amid the risks of a slowdown in the global economy and a trade conflict between New Zealand’s two largest trading partners — China and the United States.
Earlier in early September, the NZD / USD pair was unable to develop an upward correction above the local resistance level of 0.6443 and resumed decline in the descending channels on the daily and weekly charts.
Currently, NZD / USD is trading near the 0.6225 mark, below the short-term resistance level of 0.6293 (EMA200 on the 1-hour chart).
Below resistance levels 0.6293, 0.6365 (ЕМА200 on the 4-hour chart), only short positions should be considered.
An alternative scenario assumes a breakdown of the local resistance level of 0.6365 and correctional growth with targets at the resistance level of 0.6443, 0.6490 (lows in May and June). Further growth of NZD / USD is unlikely, unless, of course, the Fed also begins to aggressively reduce the interest rate.
Below the resistance level of 0.6585 (EMA200 on the daily chart), the long-term bearish trend NZD / USD prevails.
From the news today regarding NZD, you should pay attention to the publication (after 2:00 p.m. (GMT) of data on the results of a dairy auction organized by the New Zealand company Fonterra (a specialized trading platform GlobalDairyTrade – GDT). Two weeks ago, the price index for dairy products prepared by Global Dairy Trade came out with a value of +2.0%. If the data indicate a drop in world prices for dairy products, primarily milk powder, then the New Zealand dollar will decline.
Support Levels: 0.6200, 0.6100
Resistance Levels: 0.6260, 0.6293, 0.6365, 0.6425, 0.6490, 0.6535, 0.6585
Sell by market. Stop-Loss 0.6310. Take-Profit 0.6200, 0.6100
Buy Stop 0.6310. Stop-Loss 0.6250. Take-Profit 0.6365, 0.6425, 0.6490