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NZDUSD Consolidation at Local Highs

11/15/2022 11:30 AM

The NZD/USD pair is consolidating at around 0.6100, holding near the local highs from September 13.

"Bullish" activity on the US currency remains quite low, as traders are focusing on a possible change in the rhetoric of the US Federal Reserve. After the publication of fairly optimistic statistics on consumer inflation last week, markets reconsidered the likelihood of a 75 basis point hike in interest rates during the regulator's December meeting. Now, only about 20% of analysts expect such a move, while the rest are counting on a 50 basis point correction. However, some experts emphasize that the US Federal Reserve may slow down the pace of the "hawkish" rate, focusing on a smoother increase in interest rates, as inflation remains almost four times higher than the target levels.

The growth of the New Zealand currency today is hampered by uncertain macroeconomic statistics from China. Industrial Production in October again showed a slowdown from 6.3% to 5.0%, which was worse than analysts' expectations at the level of 5.2%, while Retail Sales decreased by 0.5% after increasing by 2.5% in the previous month, while analysts' forecasts assumed the preservation of positive dynamics at the level of 1.0%.

Bollinger Bands on the daily chart show a steady increase. The price range is expanding; however, it fails to catch the surge of last week's "bearish" sentiments. MACD grows, preserving a stable buy signal (located above the signal line). Stochastic, having approached its highs, reversed into a horizontal plane, indicating the risks of overbought New Zealand dollar in the near future.

Resistance levels: 0.6155, 0.6200, 0.6250, 0.6300. | Support levels: 0.6100, 0.6050, 0.6000, 0.5941.

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