The New Zealand dollar is successfully rebounding against its U.S. counterpart after forming double bottom at 0.7455. The positive correction started at the beginning of June and since then it manages to erase 50% of the 0.8468-0.7458 drop. Big part of this gain is driven by global sentiment as market participants started to take positions in relatively cheap higher yield assets. New Zealand’s economy has also showed good results in the manufacturing and in the house sector. Last week the Reserve Bank of New Zealand kept its interest rate unchanged at 2.50% and announced inflation level in the middle of the target range of 1%-3%, which are also very good indicators for stable economic growth. Today the government will report Q1 gross domestic production, which is expected to advance with 0.4%(QoQ) compared to the 0.3% growth in the previous quarter.
Binary option investors should expect key resistance around 0.8080, which coincides with the 61.8% Fibonacci retracement of the 0.8468-0.7458 drop. Break above this level will move the target towards 0.8300, which is last stop before the 2012 top at 0.8468. On the downside first support is expected at 0.7844, which is 38.2% fibo level of the mentioned movement, followed by 0.7650. In the coming days to weeks binary investors could profit from potential correction considering the overbought levels from the Stochastic and RSI oscillators and the fact that the currency pair is still below the 200-day SMA.
Disclaimer:
The information in this analysis is collected from different sources and should serve for informative purposes only. The author shall not be held responsible for the validity of the presented information. No part of this analysis recommends the purchase or sale of a currency pair or any other financial instrument.
