Tomorrow's publication of US inflation data may become a powerful driver of the dollar's dynamics: up if the CPI indicators come out with values higher than forecasted, and down if they turn out to be even weaker than expected according to the forecast.
Of the important events of tomorrow, we will also single out the meetings of the Central Bank of New Zealand and Canada, which will end with the publication of decisions on the interest rate, at 02:00 and 14:00 (GMT), respectively.
If the Bank of Canada is expected to raise the interest rate, then the RB of New Zealand may take a break, after raising at the May meeting, by 0.25% to 5.50% at the moment.
While inflationary pressures remain high and the labor market remains strong, a slowdown in demand and economic activity, as well as previous interest rate increases (OCR), which increase negative pressure on the New Zealand economy, may force the country's central bank management to refrain from further tightening, economists say.
The RBNZ's wait-and-see stance will dampen expectations of further rate hikes as other central banks continue tightening cycles. This will negatively affect the dynamics of the NZD.
On the other hand, improved trading conditions and a more stable state of the New Zealand economy compared to the economies of the G10 countries will help improve the position of the NZD in the foreign exchange market. This, in turn, will create preconditions for further growth of NZD/USD, but closer to the end of the year and next year, economists say.
From a technical point of view, the NZD/USD pair is developing an upward correction above the important short-term support levels of 0.6174, 0.6161, while remaining in the bear market zone: medium-term - below the key level 0.6220, and long-term - below the key levels 0.6460, 0.6540 (for more details, see "NZD/USD: dynamics scenarios for 07/11/2023"). For further strong movement, the price needs to break through the range between the levels of 0.6170 and 0.6220.
Support levels: 0.6174, 0.6170, 0.6161, 0.6110, 0.6090, 0.6060, 0.6000, 0.5990, 0.5975, 0.5900
Resistance levels: 0.6200, 0.6220, 0.6240, 0.6258, 0.6310, 0.6390, 0.6460, 0.6488, 0.6500, 0.6540
*) see also
- “Technical Analysis and Trading scenarios" -> Telegram - https://t.me/traderfxcrypto
- https://www.instaforex.com/forex_analysis/348431?x=PKEZZ
- channel - https://www.mql5.com/en/channels/fxcryptotrader
