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Key New Zealand Commodity Prices Decline

1/6/2023 12:37 PM

Against a lack of important macroeconomic publications over the past week and the strengthening of the US dollar, the NZD/USD pair is correcting near 0.6247.

Investors were disappointed by the report on prices for key categories of goods, which adjusted by –2.8% against the previous month: Global Dairy Trade (GDT) reported a decrease in prices for dry butter by 12.9%, milk fat – by 5.1%, skim milk – by 4.3%, lactose – by 3.6% and cheese – by 2.7%. Thus, none of the goods in the import category rose in price, and the GDT index dropped to 1031.0 points from 1060.0 points for the fourth time in a row, which is an extremely negative signal for the national economy.

The US dollar began to rise, reaching 104.800 in the USD Index yesterday, which has not been seen since December 13 last year. The currency received a positive impulse from data on the national labor market: initial jobless claims amounted to 204.0K, down from 223.0K a week earlier and 225.0K predicted by analysts, while the report of Automatic Data Processing (ADP) on Nonfarm Payrolls recorded an increase in employment by 235.0K from 182.0K, higher than the expected 150.0K.

The trading instrument began to form a local corridor, within which there was a decrease.

Technical indicators are ready to reverse and give a sell signal: fast EMAs on the Alligator indicator are approaching the signal line, and the AO oscillator histogram has moved into the sell zone, forming several bars below the transition level.

Support levels: 0.6200, 0.6030. | Resistance levels: 0.6300, 0.6460.

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