NZD/USD: general analysis
The pair NZD/USD continues trading in the downtrend. Since 22 October the New Zealand currency has lost about 350 points. At the moment the pair is consolidating near the level of 0.8185, which is a support level both on the daily chart and on the four-hour chart. Breakdown of this level can trigger aggressive sale and decline in the pair to the level of 0.8040.
The NZD is under pressure from Australia, which is a consumer of 20% of New Zealand’s export. According to forecast of OECD, GDP of Australia will fall below the level of 2.8%, which will affect trade with New Zealand and the rate of NZD/USD.
Technical indicators do not show favourable picture for the NZD. Stochastic lines are in the overbought zone, giving a sell signal. The price chart on the four-hour timeframe is below the moving average with the period 50, which also confirms downtrend. The trend will not change until the pair consolidates above the level of 0.8340.
Support and resistance
The nearest resistance level on the daily chart is 0.8340. Support level is 0.8185.
It is advisable to place short positions after breakdown of the level of 0.8185 with the target of 0.8040 and protective orders around 0.8200.
Analysts of LiteForex Group of Companies