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NZD is testing 0.59 for a breakout

11/7/2022 11:15 AM

The New Zealand dollar shows multidirectional trading dynamics, holding close to the local highs of November 2, updated at the end of last week. The NZD/USD pair is once again testing 0.5900 for a breakout, compensating for the negative gap at today's opening of trading.

The instrument is still supported by the controversial report on the US labor market, which was released on Friday and showed an increase in Nonfarm Payrolls by 261.0 thousand, with a forecast of 200.0 thousand. At the same time, the Unemployment Rate in the country increased from 3.5% to 3.7%, and the Average Hourly Earnings in October accelerated from 0.3% to 0.4% in monthly terms, but slowed down from 5.0% to 4.7% in annual terms. Investors took this data as another signal that the US Federal Reserve is likely to try to slow down the pace of interest rate hikes in the near future, but will not give up the fight against high inflation, which so far shows timid attempts to reduce from record highs.

Some pressure on the position of the New Zealand dollar today is exerted by macroeconomic statistics from China. In particular, investors reacted negatively to the decline in Exports in annual terms in October by 0.3% after rising by 5.7% in the previous month, while analysts expected the positive dynamics to continue at the level of 4.3%.

Bollinger Bands in D1 chart show quite active growth. The price range narrows slightly, limiting the potential for the development of the current "bullish" trend. MACD grows, preserving a stable buy signal (located above the signal line). Stochastic reversed upward at the end of last week and is now rapidly approaching its highs, indicating risks of the instrument being overbought in the ultra-short term.

Resistance levels: 0.5900, 0.5941, 0.6000, 0.6049. | Support levels: 0.5850, 0.5773, 0.5720, 0.5671.

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