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GDP Data did not Support the New Zealand Currency

3/28/2023 1:42 PM

Over the past two weeks, the NZD/USD pair has been making attempts to grow, having reversed around 0.6103 (Murray level [0/8]). As a result, the quotes tested the 0.6286 mark (Murray level [3/8]), but they could not break higher and lost some of the positions they won, falling to the middle line of the Bollinger Bands (0.6195).

Currently, the instrument is under the influence of a number of opposite factors: the American banking crisis and the readiness of the US Fed to suspend monetary policy tightening if necessary contribute to price growth. Thus, despite the measures to support creditors and the rhetoric of the authorities about the stability of the national financial system, investors are still wary of the current situation, fearing a massive transfer of depositors' funds from small regional financial structures to large ones protected by the federal support program. The beginning of the discussion by US Fed officials of the pause in raising the interest rate also puts pressure on the US currency, strengthening the position of alternative assets.

On the other hand, the growth of the NZD/USD pair is hindered by the general state of the New Zealand economy, which is under significant pressure from the global crisis. The published statistics on gross domestic product (GDP) for Q4 2022 turned out to be weak: on an annualized basis, the economy grew by only 2.2% instead of the expected 3.3%, and on a quarterly basis it immediately shrank by 0.6%, which creates a serious probability of a technical recession already in Q1. In addition, according to the Global Dairy Trade auction, for more than a year there has been a steady downward trend in prices for milk and dairy products, and the last time in mid-March statistics recorded a correction of another -2.6%.

Nevertheless, while all investors' attention is focused on the US banking sector, the potential for the resumption of growth in the quotes of the trading instrument will remain.

Now the price is trying to consolidate above the level of 0.6225 (Murray level [2/8], Fibo retracement 38.2%), however, the key for the "bulls" is the level of 0.6286 (Murray level [3/8]), the breakout of which will give the prospect of further growth to the area of 0.6347 (Murray level [4/8]), 0.6408 (Murray level [5/8], Fibo retracement 50.0%), 0.6469 (Murray level [6/8]). The most important level for the "bears" remains 0.6103 (Murray level [0/8]), at the breakdown of which the downward dynamics will increase to 0.6042 (Murray level [-1/8]) and 0.5960 (Fibo retracement 23.6%).

Technical indicators do not give a single signal: the Bollinger Bands are horizontal, the MACD histogram is at the zero line, its volumes are insignificant, and the Stochastic is directed downwards.

Resistance levels: 0.6286, 0.6347, 0.6408, 0.6469. | Support levels: 0.6103, 0.6042, 0.5960.

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