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NZDUSD Growth may Resume after Correction

11/17/2022 2:58 PM

The NZD/USD pair has been rising since the middle of last month and are now in the 0.6110 area. The instrument's position is supported by a downward correction of the US currency against the backdrop of a possible slowdown in the "hawkish" rate of the US Federal Reserve and rising prices for food products, including milk and dairy products, actively exported from New Zealand.

After the decrease in inflation indicators in the US in October, the market is trying to predict the next steps of the financial regulator while giving preference to risky assets alternative to the dollar. The US economy currently looks stable and, according to experts, can avoid recession, although some decline in indicators is likely to continue in the future, which is stated by the latest economic statistics: in October, industrial production fell by 0.1% with forecast for growth of 0.2%, while the volume of retail sales immediately added 1.3%, although preliminary estimates indicated a value of 1.0%.

The NZD/USD pair is supported by the current increase in the cost of some goods: according to the latest data from the Global Dairy Trade auction, published last Tuesday, the price of milk and dairy products corrected by 2.4%, which is the first increase since September. Continuing this trend will improve New Zealand's trading prospects, which, in turn, will strengthen the quotations of the national currency.

The price is attempting a downward correction within the short-term uptrend, which may continue towards 0.5981 (Murrey [5/8]) and 0.5910 (middle line of Bollinger Bands).

Nevertheless, the current trend is being signaled by the readings of technical indicators: Stochastic has reversed upwards, and the MACD histogram is increasing in the positive zone. If the level 0.6225 (Murrey [7/8]) is broken upwards, the upward dynamics may continue to 0.6347 (Murrey [8/8]) and 0.6470 (Murrey [+1/8]).

Resistance levels: 0.6225, 0.6347, 0.6470. | Support levels: 0.6103, 0.5981, 0.5910.

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