On Monday, amid another fall in Asian stock markets, the NZD/USD pair is also declining, though the US dollar is weakening against the Euro, the Pound, the Yen and the Frank.

The pair is affected by a slowdown in the Chinese economy, China's stock market fall, weak economic statistics, an increasing unemployment rate in the second quarter and a decreasing size of the economically active population. On the other hand, the pair gains support from the uncertainty about the Fed's intentions, the weakening US dollar and from growing prices for dairy products.

This week, the Reserve Bank of New Zealand releases its Inflation Expectations for the third quarter on Tuesday; and Trade Balance statistics for July are due on Wednesday.

NZD/USD: variants are possible

Support and resistance

The pair has been trading between 0.6765 and 0.6510 since the beginning of July.

OsMA and Stochastic on the daily chart are in the buy zone, while on the 4-hour chart they indicate sales. If the level of 0.6610 (EMA144 on the 4-hour chart) is broken through, the pair may grow to 0.6650 (EMA200) and further to 0.6725, 0.6765, 0.6800.

The highest correction is likely to be restricted by 0.6890 (50% Fibonacci); only the breakout of 0.6890 would push the pair up to 0.7000, 0.7100, 0.7250 and even to 0.7345. The breakdown of 0.6435 (61.8% Fibonacci) would lead to the fall to 0.6000 (2006 year lows), 0.5000 (2009 year lows).

Support levels: 0.6510, 0.6435, 0.6400.

Resistance levels: 0.6610, 0.6650, 0.6700, 0.6725, 0.6765, 0.6800.

Source: Claws&Horns

The information provided is for educational purposes only and should not be considered as investment advice.