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The NZDUSD is Developing Flat Dynamics

2/21/2023 10:55 AM

The NZD/USD pair is trading in different directions, consolidating near 0.6240. The flat dynamics replaced the insignificant corrective growth of the instrument the day before, which was mainly due to technical factors and a fairly "thin" market amid the closing of stock exchanges in the US on the occasion of the Presidents' Day.

In turn, some pressure on the positions of the NZD/USD pair was exerted by mixed macroeconomic statistics from New Zealand. The Producer Price Index Input for the fourth quarter of 2022 added 0.5% after an increase of 0.8% in the previous period, while analysts' forecasts assumed an increase of 2.4%. The Producer Price Index Output for the same period slowed down from 1.6% to 0.9%, which was also below the expected 2.1%. Markets took this data as another indirect evidence of weakening inflationary risks, which may prompt the Reserve Bank of New Zealand (RBNZ) to slow down the pace of interest rate adjustment. On Wednesday, February 22, the regular meeting of the regulator will take place, at which the value can be increased by 50 basis points to 4.75%.

Bollinger Bands on the daily chart show a steady decline. The price range is narrowing, reflecting the corrective growth attempt made at the end of last week. MACD is falling, keeping a relatively strong sell signal (the histogram is below the signal line). Stochastic, having rebounded from the level of 20, is trying to develop a corrective uptrend, signaling the risks of the New Zealand dollar being oversold in the ultra-short term.

Resistance levels: 0.6250, 0.6288, 0.6350, 0.6400. | Support levels: 0.6200, 0.6155, 0.6100, 0.6050.

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