NZD/USD continues to decline as the market becomes cautious, closing on 0.5900.
- The September stagnation of China’s inflation caused the NZD/USD exchange rate to further drop.
- A small percentage of investors anticipate that by year’s end, the Fed will have raised interest rates once more.
- After failing to break above the horizontal resistance marked at 0.6050, NZD/USD executes a vertical sell-off.
For the third trading session, the NZD/USD pair remained negative as concerns over a slowdown in China increased following a dismal inflation report. The Kiwi asset fell to about 0.5900 as the US Dollar gained favour following a resolute US inflation report and ongoing deflationary threats in China.
Early on Friday, the Chinese National Bureau of Statistics revealed that September inflation stayed steady, contrary to investor expectations that it would accelerate to 0.2% from the previous figure of 0.1%. Compared to the August reading of 0.3% and the consensus, the monthly inflation figures increased at a lesser rate of 0.2%. The sluggish demand in China’s home market caused the New Zealand Dollar, which is a proxy for China’s economic prospects, to fall.
After making a correction move to about 106.30, the US Dollar Index (DXY) is now rising again as some investors hold out optimism that the Federal Reserve (Fed) would ultimately boost interest rates once more, bringing them to 5.50–5.75% by year’s end.
NZD/USD TECHNICAL ANALYSIS DAILY CHART:
Technical Overview
NZD/USD is currently trading within a down channel.
NZD/USD is positioned below all Moving Averages (SMA).
The Relative Strength Index (RSI) is in selling zone, while the Stochastic oscillator suggests negative trend.
Immediate Resistance level: 0.5965
Immediate support level: 0.5864
HOW TO TRADE NZD/USD
After gaining, the price of NZD/USD fell and started trading in a range. NZD/USD tried attempting upside but failed as a result it fell. Currently the price is trading around support zone, if this zone is broken down then we can expect furthermore fall.
TRADE SUGGESTION- STOP SELL – 0.5876, TAKE PROFIT AT- 0.5806, SL AT- 0.5929.