Current trend

Against the stabilization of the American dollar, the NZD/USD pair is trading near the level of 0.5900.

New Zealand’s currency extended its decline, which intensified following today’s inflation report, with New Zealand’s consumer price index accelerating 1.8% in the third quarter after rising 1.1% earlier, pushing the annual rate up 5.6% from 6.0% in the previous period. The key factor in the dynamics was food products, prices for which increased by 9.4%, and the most growing segment was bread and cereals, which rose in price by 11.5%. The largest contribution to the quarterly figure was made by gasoline prices, adjusted by 0.41 dollars in September due to the end of tax breaks.

The American dollar is holding around 106.000 in the USD Index amid the absence of important macroeconomic releases but September retail sales data will be published this evening: the indicator may slow down growth from 0.6% to 0.3%, and the core value – from 0.6% to 0.2%, which could lead to a local weakening of the US currency.

Support and resistance

The trading instrument is correcting, trying to consolidate below the local ascending corridor with dynamic boundaries of 0.6070–0.5900.

Technical indicators are holding a local sell signal: fast EMAs on the “Alligator” indicator have crossed the signal line down and are ready to continue declining, and the AO histogram is forming corrective bars in the sales zone.

Resistance levels: 0.5940, 0.6020.

Support levels: 0.5860, 0.5770.

Trading tips

Short positions may be opened after the price declines and consolidates below 0.5860 with the target at 0.5770. Stop loss – 0.5900. Implementation period: 7 days or more.

Long positions may be opened after a reversal, growth, and consolidation of the price above 0.5940 with the target at 0.6020. Stop loss – 0.5900.