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NZDUSD Medium-term Trend Changed Upwards

1/24/2023 11:41 AM

The current growth of the NZD/USD pair to level 0.6515 is associated with the weakness of the American dollar against the main competitors.

Investors are preparing for the next meeting of the US Federal Reserve, which will take place on February 1. The interest rate increase will be reduced from 0.50% to 0.25% against the background of inflation, which renewed the low of October 2021 and continued to reduce after reaching 7.1% YoY in November and 7.7% YoY in the previous month. In the case of softening the “hawkish” rhetoric of the department, the currency of other G10 countries will be more promising for investments, where a more significant tightening of monetary policy is expected. On Thursday, investors expect the publication of the US Q4 gross domestic product (GDP) data: according to forecasts, the indicator slowed from 3.2% to 2.8%.

Also, the quotes are supported by a high level of inflation in New Zealand. Today at 23:45 (GMT+2), Q4 data on the index of national consumer prices will be released: according to experts, the indicator will slightly decrease from 7.2% to 7.1% YoY, preserving the potential for further growth of the asset to 0.6600.

The long-term trend is ascending, and today the quotes are trying to consolidate above the resistance level of 0.6500, after which the next purpose will be 0.6600, with a breakout of which an increase to level 0.6750 is possible.

The medium-term trend was replaced by an ascending one last week. After the breakout of the target zone 0.6389–0.6371, the next goal was zone 2 (0.6569–0.6551), and the key support has shifted to the area 0.6350–0.6332 after which it will be possible to open new short positions.

Resistance levels: 0.6500, 0.6600, 0.6750. | Support levels: 0.6310, 0.6210, 0.6085.

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