The New Zealand dollar declined against the USD last week due to strengthening in the American currency. The USD was supported by the positive inflation data. On Friday the USD went up after the release of the consumer price index excluding food and energy for April. The index rose by 0.3%, while the same index a month ago was 0.2% and the change in the index had not been expected.
Later, the head of the US Fed Janet Yellen made a speech in Providence expressing pessimistic view on the recovery of the US economy.
Tomorrow, New Zealand’s Bureau of Statistics will release trade balance data, showing the ratio between the volumes of import and export. The previous index demonstrated trade surplus of 631 million. Due to seasonal changes the trade balance is expected to be positive, although lower than the previous level.
Support and resistance
Technical indicator Stochastic has entered into the oversold zone and is giving a buy signal. The nearest resistance level is the moving average line with the period 100 (0.7342). Support level is the lows of the last week (0.7282).
It is recommended to open long positions with the target of 0.7342 and stop-loss at 0.7282.