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The New Zealand Dollar Updates Local Highs

12/5/2022 10:49 AM

The New Zealand dollar shows a moderate increase, developing a strong "bullish" signal formed last week. NZD/USD is testing 0.6430 for a breakout, updating local highs from August 15.

The uptrend is largely due to technical factors, while fundamental data and macroeconomic statistics remain ambiguous. The US dollar received a short-term impetus to growth after the publication of data on the national labor market on Friday, December 2. In particular, the report reflected an increase in the number of Nonfarm Payrolls in November by 263.0 thousand after an increase of 284.0 thousand (revised from 261.0 thousand) in the previous month, while analysts expected an increase of only 200.0 thousand.

Some pressure on the position of the instrument is exerted by weak macroeconomic statistics from New Zealand and China. The New Zealand ANZ Commodity Price Index in November showed a decrease of 3.9% after a decline of 3.4% in October, although analysts expected -1.5%. In turn, the Caixin Services PMI in China in November corrected from 48.4 points to 46.7 points, with the forecast of growth to 48.8 points.

Meanwhile, according to a survey conducted by the New Zealand Herald, social inequality is increasing in the country, which is based on increasing differentiation of citizens by income level. Also, 74% of New Zealanders pointed to an increase in property stratification due to the uneven opportunities for the country's residents to change their living conditions (about 70% of respondents said this). In addition, the quarantine decisions of the government during the development of the coronavirus pandemic have affected the decrease in the cohesion of the nation.

Bollinger Bands in D1 chart show active growth. The price range is expanding but it fails to conform to the surge of "bullish" activity at the moment. MACD indicator is growing, while preserving a rather 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 ultra-short term.

Resistance levels: 0.6450, 0.6500, 0.6535, 0.6600. | Support levels: 0.6400, 0.6350, 0.6288, 0.6250.

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