Scenario

Timeframe - Intraday

Recommendation - BUY

Entry Point - 0.7232

Take Profit - 0.7270, 0.7300

Stop Loss - 0.7170

Key Levels - 0.6873, 0.6900, 0.6965, 0.7000, 0.7053, 0.7119, 0.7147, 0.7232, 0.7271, 0.7321

Alternative scenario

Recommendation - SELL STOP

Entry Point - 0.7200

Take Profit - 0.7000

Stop Loss - 0.7250

Key Levels - 0.6873, 0.6900, 0.6965, 0.7000, 0.7053, 0.7119, 0.7147, 0.7232, 0.7271, 0.7321

Current trend

The NZ Dollar has been showing a strong growth towards new highs against the US Dollar.

Upward dynamics is caused by weakness of the US currency which remains under pressure from Fed’s caution regarding interest rate increases. At the beginning of the week, Fed’s Chair Janet Yellen said again that the current approach remains appropriate due to economic stability risks.

In recent days, the referendum on Britain's membership of the EU has had a large impact on markets. As polling data shows approximately 50/50 chances of Brexit, the situation remains very tense.

Support and resistance

Bollinger Bands on the daily chart is directed up while the price range remains almost unchanged. MACD is growing and keeping a buy signal. Stochastic has reached the overbought zone and turned horizontally.

The indicators recommend waiting for clearer trading signals.

Support levels: 0.7147, 0.7119 (21 June low), 0.7095, 0.7053, 0.7021, 0.7000 (16 June level), 0.6965, 0.6934, 0.6900, 0.6873 (3 June level).

Resistance levels: 0.7200, 0.7232 (10 June 2015 high), 0.7271, 0.7321 (25 May 2015 high).

Trading tips

Long positions can be opened after the price breaks out and consolidates above the level of 0.7200 (with appropriate indicators signals) with targets at 0.7270, 0.7300 and stop-loss at 0.7170. Validity – 2-3 days.

Short positions can be opened if the price rebounds down from the level of 0.7200 with the target at 0.7000 and stop-loss at 0.7250. Validity – 2-3 days.