Current trend
The pair has been trading in a narrow downward channel for almost three weeks, but broke through its upper border on Wednesday and reached the middle line of Bollinger Bands at the level of 0.7000. The reason for this growth was the interview by the US President Donald Trump to Wall Street Journal in which he stated he was worried by the strength of US dollar and supported the preservation of low interest rates. Investors believe the President may oppose FOMC decision to tighten the monetary policy. It is difficult to say whether these allegations have any potential, because a lot will depend on the reaction of FOMC and comments of its members. Generally, low prices on dairy products continue to negatively affect the New Zealand currency. In the beginning of March Global Dairy Trade Index dropped by 6.3% and since then has made only weak attempts of recovery. In this situation a fall may resume in the near future.
Support and resistance
Technically, the price is testing the middle line of Bollinger Bands and after consolidating above 0.7012 (Fibo correction 23.6%) it may continue growing to 0.7070, 0.7095 (correction 38.2%) and 0.7160 (correction 50,0%). If the price returns to the downward channel the fall may continue to the levels of 0.6875 and 0.6800. Technical indicators show growth: MACD histogram is reducing in the negative zone, and Stochastic is directed upwards.
Support levels: 0.6935, 0.6875, 0.6800.
Resistance levels: 0.7012, 0.7095, 0.7160.
Trading tips
In the current situation long positions may be opened above 0.7012 with targets at 0.7070, 0.7095, 0.7160 and stop-loss at 0.6980.
Short positions may be opened from 0.6935 with targets at 0.6875, 0.6800 and stop-loss at 0.6970.
The pair has been trading in a narrow downward channel for almost three weeks, but broke through its upper border on Wednesday and reached the middle line of Bollinger Bands at the level of 0.7000. The reason for this growth was the interview by the US President Donald Trump to Wall Street Journal in which he stated he was worried by the strength of US dollar and supported the preservation of low interest rates. Investors believe the President may oppose FOMC decision to tighten the monetary policy. It is difficult to say whether these allegations have any potential, because a lot will depend on the reaction of FOMC and comments of its members. Generally, low prices on dairy products continue to negatively affect the New Zealand currency. In the beginning of March Global Dairy Trade Index dropped by 6.3% and since then has made only weak attempts of recovery. In this situation a fall may resume in the near future.
Support and resistance
Technically, the price is testing the middle line of Bollinger Bands and after consolidating above 0.7012 (Fibo correction 23.6%) it may continue growing to 0.7070, 0.7095 (correction 38.2%) and 0.7160 (correction 50,0%). If the price returns to the downward channel the fall may continue to the levels of 0.6875 and 0.6800. Technical indicators show growth: MACD histogram is reducing in the negative zone, and Stochastic is directed upwards.
Support levels: 0.6935, 0.6875, 0.6800.
Resistance levels: 0.7012, 0.7095, 0.7160.
Trading tips
In the current situation long positions may be opened above 0.7012 with targets at 0.7070, 0.7095, 0.7160 and stop-loss at 0.6980.
Short positions may be opened from 0.6935 with targets at 0.6875, 0.6800 and stop-loss at 0.6970.