NZDUSD continues to form a “Head and Shoulders” pattern

Current dynamics

The NZD / USD pair continues to demonstrate a moderate downward trend, trading near the 0.7195 level.

The New Zealand currency continues to trade fairly confidently against its main competitors, including the US dollar. Experts say that one of the main reasons for such dynamics is the rather rapid economic recovery. Consumer spending continued to rise, as did commodity prices, which rose 1.8% in December, after 0.9% in November, according to ANZ. The inflation rate is stable at 1.4%, which is within the range indicated by the RBNZ.

The US dollar continues its volatile dynamics, after declining again, returning to a range above the key level of 90 points in the index, trading at 90.380. The main factor supporting the US currency was the stable macroeconomic statistics from the US: the core consumer price index in December amounted to 0.1%, in line with expectations; the consumer price index was also in line with the forecast and amounted to 0.4% in December.

Support and resistance levels

The price continues to form the second shoulder of the local head and shoulders reversal pattern. Technical indicators are in a state of local selling, which indicates a high potential for further decline and implementation of the pattern. The swing range of the EMA on the alligator indicator continues to expand, and the histogram of the AO oscillator is trading in the negative zone.

Resistance levels: 0.7233, 0.7316

Support levels: 0.7155, 0.7030

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