Until the end of May, there was no doubt in the uptrend. However, in the summer, we observe a strong downward movement, which actually turns the resistance line down. Will the uptrend recover, or can we still talk about a reversal and the beginning of a long way down? - We'll see in this review.
The New Zealand dollar has been under pressure for the past few months as a commodity risk asset. Investors began to doubt in the efficiency of investing in risky assets when the Delta coronavirus strain began to spread around the world, and many countries began to return to lockdown. On the other hand, New Zealand's largest trading partner, China, began to show a slowdown in economic growth, and business activity decreased in China to 50.6 pips.
In the absence of any macroeconomic reports directly in New Zealand and Japan, the rates continued solely under the influence of external factors. We see that the rates are recovering at a weak pace. Next week, volatility increases because a large array of reports is expected in Japan, including Japan's GDP and the trade balance. However, only due to good macroeconomic reports, it will be difficult for the yen to recover - investors ' interest in weak assets is necessary, which is currently very limited.
Most of the technical analysis tools signal the effectiveness of the deals to BUY, and last week we were fully convinced of the potential of the New Zealand economy, where in the 2nd quarter of 2021, unemployment immediately fell by 0.7% and amounted to only 4%. There is no unemployment below this level almost anywhere and in New Zealand itself, it has also not been for a very long time. Therefore, we believe that the period of decline in the rates can be considered as an excellent period for Buying transactions in the long term.
