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The NZDUSD Reached the Resistance Level of 0.6270
3/20/2023 1:44 PMThe NZD/USD pair is trading around 0.6252, maintaining a high decline potential ahead of the US Fed monetary policy meeting scheduled for March 22.
According to surveys, most economists of large banks are of the opinion that the US regulator will raise the interest rate by 25 basis points to 5.00%, despite the difficult situation in the financial sector. At the same time, the CME FedWatch Tool today indicates the probability of maintaining the value at the current level of 4.75%, although a day ago the prospects for adjustment were estimated at 62.0%.
As for the New Zealand economy, it can be noted that it continues to experience inflationary pressure even after the interest rate increase at the last meeting to 4.75%. Inflation is holding steady above 7.0%, and if the trend does not change in the near future, investors will expect new tough decisions from the Reserve Bank of New Zealand. If the regulator goes to tighten monetary policy in April, this will become a driver for strengthening the position of the national currency. Until then, it is likely that the NZD/USD pair will continue to decline with a target at 0.6085.
The long-term trend changed to a downward one in early March. After that, the pair reached the support level of 0.6085, from which it corrected to the resistance area of 0.6270, which is currently held by sellers, which makes it possible for bidders to consider new short positions with a target at 0.6085. If this mark is broken down, then the next target for sales will be the level of 0.5955. An alternative scenario assumes a breakout of the 0.6270 mark, and in this case, a trend change and an increase in the quotes of the trading instrument to the area of 0.6530 should be expected.
The mid-term trend is downward. Last week, the NZD/USD pair corrected to the key trend resistance area of 0.6282–0.6264. The zone is being held, so it is possible to consider selling the instrument with a target at the March minimum of 0.6088, if it is reached, the next target will be 0.5998–0.5980.
Resistance levels: 0.6270, 0.6530. | Support levels: 0.6085, 0.5955.
