Yesterday the NZD/USD pair grew due to the suspending of US federal offices work, while the market reaction was quite restrained. However, if the government does not return to a normal operating mode in the nearest future, the pair can strengthen to the level of 0.7500. The situation reflects the high level of political uncertainty and prevents Fed from planned actions.
As there is lack of key macroeconomic event in both counties, the traders are focused on the Republicans and Democrats negotiations, and the key issues are the growth of federal budget spending and increasing of the government debt. Tomorrow US Markit PMI releases are worth traders’ attention at 16:45 (GMT+2).
Support and resistance
On the 4-hour chart, the instrument was corrected to the upper border of Bollinger Bands. The indicator is pointed upwards, as the price range is widening, reflecting the development of the upward trend. MACD histogram is in the positive zone, keeping strong buy signal. Stochastic has left the overbought area and forms a sell signal.