The pair USD/NZD reached two-weeks high last Friday and tested 23.6% Fibonacci correction. This week, however, the pair is falling again despite negative Retail Sales data for June in the US that showed a decrease by 0.3%.
Today, the GlobalDairyTrade milk price index is out that is expected to shrink again, which could lead to the weakening of the ZND as milk products make up a substantial part of the country’s exports.
Also, the Fed Chair Janet Yellen is giving her speech in the US Congress today and is going to present a mid-year report of the regulator’s activity. Investors are looking for the hints in her speech regarding the anticipated interest rates hike.
Support and resistance
The price bounced off the 23.6% Fibonacci correction and reached the lower border of an upward channel, which reminds of a pennant shape. The breakdown of the bottom border and consolidation below 0.6670 would allow for the further fall towards 0.6630 and 0.6600.
An upward movement would become possible after the breakthrough of the 23.6% Fibonacci arc and consolidation above 0.6710 (middle MA of Bollinger Bands). The targets can become0.6765, 0.6800.
Support levels: 0.6670, 0.6630, 0.6600.
Resistance levels: 0.6765, 0.6800, 0.6850.
Open short positions from 0.6670 with targets at 0.6630, 0.6600 and stop-loss at 0.6700.
Long positions can be opened after the breakout of the level of 0.6710 with targets at 0.6765, 0.6800 and stop-loss at 0.6670.