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NZDUSD Retreats from Local Highs

10/20/2022 10:46 AM

The New Zealand dollar shows an uncertain decline, developing a weak corrective impetus formed the day before. The American currency was moderately supported yesterday by the economic report, Beige Book, published by the US Federal Reserve.

Among other things, the regulator pointed to a moderate increase in economic activity for the period from August to September, noting, however, that depending on industries and districts, activity differs significantly. There is also a slight decrease in demand in response to the department's actions to increase the cost of borrowing. Manufacturing activity was broadly flat, but showed weak growth in some counties as supply chains stabilized. The situation on the housing market worsened somewhat due to a sharp increase in the cost of apartments and higher interest rates on mortgage loans. In particular, this was confirmed by the statistics on the number of Building Permits, reflecting an increase in the indicator by 1.4% in September from 1.542 million to 1.564 million instead of the expected decline to 1.530 million, but the volume of Housing Starts decreased by 8.1% from 1.566 million to 1.439 million while analysts had forecast 1.475 million. The report on the labor market was also optimistic, reflecting a moderate pace of increase in the level of Employment and Average Earnings in most districts.

The focus of investors today will be the speeches of the US Federal Reserve. On Friday, New Zealand will release data on the dynamics of Imports and Exports for September.

In the D1 chart, Bollinger Bands are reversing horizontally. The price range has remained virtually unchanged for several days, remaining quite spacious for the current level of activity in the market. MACD grows, preserving a stable buy signal (located above the signal line). Stochastic approaching the level of "80" is trying to reverse into a downward plane, signaling in favor of the development of a corrective decline in the ultra-short term.

Resistance levels: 0.5720, 0.5800, 0.5850, 0.5900. | Support levels: 0.5621, 0.5563, 0.5511, 0.5467.

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