The NZD/USD pair has been actively adding in value since the second half of October and this week reached four-month highs around 0.6410.
The USD is under pressure due to a likely slowdown in the pace of monetary policy tightening in the USA and signs of a weakening of the national labor market. Earlier, the head of the US Fed Jerome Powell confirmed the expediency of a less significant increase in the interest rate, which caused the market to be confident that at the December meeting it would be adjusted by 50.0 basis percentage points, and not by 75.0 basis percentage points, as it was earlier. The statistics from the labor market published this week turned out to be weak: the number of vacancies in the JOLTS market in October decreased from 10.687M to 10.334M, and employent in November, according to calculations by Automatic Data Processing (ADP), increased by 127.0K, which is less than both the forecast of 200.0K and the October value of 239.0K. Today, investors are waiting for the release of federal employment data for November, and the indicator may also decrease from 261.0K to 200.0K. We also note the slowdown in business activity in the US industry: the index in the manufacturing sector from the Institute of Supply Management (ISM) fell from 50.2 points to 49.0 points and ended up in a stagnation zone.
Against this background, the New Zealand currency is seen as more preferable for investment. In addition, inflationary pressure on the national economy is also showing signs of decreasing. According to New Zealand's foreign trade data published today, in Q3 2022, the growth in import prices slowed from 6.5% to 6.3%, and for exports – from 3.7% to 3.1%.
Technically, the price is close to 0.6420 (Fibo retracement 50.0%), which is seen as key for the "bulls", its breakout will give the prospect of further growth up to the level of 0.6590 (Murray level [+2/8]). If the level of 0.6225 (Murray level [7/8], Fibo retracement 38.2%) is broken down, the decline may resume to the area of 0.5981 (Murray level [5/8], Fibo retracement 23.6%), and 0.5859 (Murray level [4/8]), however, this movement option seems less likely, since technical indicators point out the preservation of upward trend: the Bollinger Bands and the Stochastic are directed upwards, the MACD histogram increases in the positive zone.
Resistance levels: 0.6420, 0.6590. | Support levels: 0.6225, 0.5981, 0.5859.