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New Zealand Dollar is Developing a "Bearish" Trend

2/17/2023 10:38 AM

The NZD/USD pair shows a fairly active decline, developing a strong "bearish" trend, formed on Tuesday, February 14, when local highs from February 3 were updated. The instrument is testing 0.6220, below which the New Zealand dollar last fell on January 6.

The downward dynamics is due to the release of macroeconomic statistics from the US. In particular, on Wednesday, investors paid attention to data on Retail Sales: in January, the indicator rose by 3.0% after falling by 1.1% in the previous month, while analysts expected only 1.8%. Yesterday's data once again reinforced doubts that the US Federal Reserve will soon decide to take steps towards easing monetary policy. The Producer Price Index in January showed an increase of 0.7% after falling by 0.2% a month earlier, while analysts expected an increase in the indicator by 0.4%, and in annual terms, the PPI slowed down from 6.5% to 6 .0% with a forecast of a reduction to 5.4%.

Bollinger Bands on the daily chart show a steady decline. The price range expands from below, making way for new local lows for the "bears". MACD is falling, keeping a relatively strong sell signal (the histogram is below the signal line). Stochastic retains a steady downtrend but is located in close proximity to its lows, which indicates the risks of oversold New Zealand dollar in the near future.

Resistance levels: 0.6250, 0.6288, 0.6350, 0.6400. | Support levels: 0.6200, 0.6155, 0.6100, 0.6050.

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