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As we noted in our review "DXY: Fed plans and dollar prospects" today, there are growing fears in the market that the rapid tightening of monetary policy by the world's largest central banks, which so far cannot stop accelerating inflation, will lead to recession and stagflation in the global economy. These fears lead to an increase in demand for a safe dollar, which, in turn, puts pressure on stock markets and commodity currencies.
In particular, the New Zealand dollar and the NZD/USD pair remain under pressure. At the time of publication of this article, it is traded near the mark of 0.6273, in the bear market zone - below the key resistance levels 0.6810 (EMA200 on the weekly chart), 0.6745 (Fibonacci 23.6% of the correction in the global wave of the pair's decline from the mark of 0.8820 in 2014-2015), 0.6700 (EMA200 on the daily chart).
NZD/USD is under pressure from the totally strengthening US dollar. The downward dynamics of NZD/USD prevails, and after a retest of the local support level 0.6200, the price is likely to move lower towards the level 0.6105 (the minimum of the pair’s decline wave from the level 0.8820 in 2014-2015), and after the breakdown of the level 0.6000, towards the marks of 0.5700, 0.5800, and it is possible that lower, to the 0.5500 mark, where the price was in March 2020.
In an alternative scenario, NZD/USD will head towards the local resistance levels 0.6540, 0.6570, and the signal for this will be a breakdown of the resistance levels 0.6316 (EMA200 on the 1-hour chart), 0.6409 (EMA200 on the 4-hour chart).
Support levels: 0.6245, 0.6200, 0.6105, 0.6100, 0.6075, 0.6000, 0.5910, 0.5850
Resistance levels: 0.6300, 0.6316, 0.6409, 0.6465, 0.6540, 0.6570
Trading recommendations
Sell Stop 0.6240. Stop Loss 0.6320. Take-Profit 0.6200, 0.6105, 0.6100, 0.6075, 0.6000, 0.5910, 0.5850
Buy Stop 0.6320. Stop Loss 0.6240. Take Profit 0.6409, 0.6465, 0.6540, 0.6570
