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The NZDUSD Maintains its Uptrend

2/9/2023 2:03 PM

The NZD/USD pair failed to break the support level of 0.6310, and now the "bulls" are accumulating trading volumes to continue the uptrend.

The quotes are supported by the dynamics of consumer prices in New Zealand, which, according to the latest data, are kept at 7.2% YoY. The country's government believes that the growth rate may continue and is preparing to take restrictive measures. The Treasury estimated that the recent flooding would add about 0.4 percentage points to inflation in the first half of 2023 and noted that the overall impact on gross domestic product (GDP) could be neutral in the March quarter, but it will pick up later. Officials announced a series of policy changes, including a 7.1% increase in the minimum wage to 22.70 dollars an hour on April 1 and an end to the Social Security scheme at that date.

The negative factor hindering the upward dynamics is the statements of the US Federal Reserve officials who set up the markets to keep the "hawkish" rhetoric. According to Neil Kashkari, president of the Federal Reserve Bank (FRB) of Minneapolis, the interest rate will exceed 5.0%, and then the regulator will hold the rate unchanged for a long time before determining the further direction of monetary policy.

Thus, the NZD/USD pair has reached an equilibrium price above 0.6300 and, given the technical analysis, will continue moving with the target at 0.6600.

The long-term trend is upward. At the beginning of the week, the quotes unsuccessfully tested the support level of 0.6310 as part of a downward correction, and we can assume that the long-term trend will continue with the first target at 0.6500. If during the trading session, 0.6310 is broken down, then the correction will continue to the trend line around 0.6210.

The medium-term trend has changed to a downtrend this week, the price has overcome the target zone 0.6358–0.6340, and zone 2 (0.6178–0.6160) became the target for sales. At the moment, the price is correcting with the target at the border of the new trend of 0.6468–0.6450, after which it will be possible to consider new sales with the target at the current week's low 0.6272.

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

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