The New Zealand dollar shows moderate growth, updating local highs from August 17.
The NZD/USD pair is testing 0.6330 for a breakout, developing the "bullish" momentum formed on Tuesday against the backdrop of a rapid decline in the US currency after the speech of US Federal Reserve Chairman Jerome Powell, who confirmed the regulator's intention to slow down the pace of monetary tightening starting from the December meeting. The interest rate is likely to be increased by 50 basis points, after which the US Fed may move to a step of 25 basis points or stop the adjustment altogether if there is enough evidence that consumer inflation is moving towards the regulator's target. Additional pressure on the positions of the American currency was exerted by the report of the Automatic Data Processing (ADP) company released the day before: in November, employment in the private sector increased by only 127.0 thousand jobs after an increase of 239.0 thousand a month earlier, while analysts expected 200.0 thousand. In turn, statistics on Gross Domestic Product (GDP) pointed to the growth of the US economy by 2.9% in the third quarter. The indicator was revised from 2.6% against the backdrop of increased consumer spending.
Quotes of the NZD/USD pair remain under pressure from weak statistics from New Zealand. Thus, the ANZ Activity Outlook in November was adjusted from -2.5% to -13.7%, which turned out to be significantly worse than the -2.1% expected by analysts. The Governor of the Reserve Bank of New Zealand (RBNZ), Adrian Orr, noted that the regulator deliberately provoked a recession in order to reduce inflation after raising the official monetary rate by 75 basis points to 4.25%, and signaled to investors that next year the rate could reach a maximum of 5.5%. The RBA's new forecast assumes that the economy will contract by 1.0% over 12 months starting in April and then remain at that level for another 6 months before returning to growth.
Bollinger Bands on the daily chart show a steady increase. The price range is expanding but it fails to conform to the "bullish" activity at the moment. MACD indicator is growing keeping a stable buy signal (located above the signal line). Stochastic shows similar dynamics; however, it indicates the risks of the instrument being overbought in the ultra-short term.
Resistance levels: 0.6350, 0.6400, 0.6450, 0.6500. | Support levels: 0.6288, 0.6250, 0.6200, 0.6155.