Overview:
NZD/USD is expected to consolidate with bearish bias after hitting seven-week low at 0.8490 on Tuesday as markets await FOMC’s interest rate decision. Kiwi is hurt by Fonterra’s cut of its forecast for the 2014/15 season payout to NZ$6.00 a kilo of milk solids from NZ$7.00 late May. NZD/USD is also weighed by the positive dollar sentiment, increased investor risk aversion, Kiwi sales on buoyant AUD/NZD cross and continued impact from Reserve Bank of New Zealand Gov. Wheeler’s comment last week that the Kiwi’s strength is “unjustified and unsustainable” and signal of a pause in the RBNZ’s rate-tightening cycle. But NZD/USD losses are tempered by the NZD-USD interest differential. Daily chart is negative-biased as MACD is bearish, stochastics stays suppressed at oversold zone, five and 15-day moving averages are declining.
Trading recommendations:
The pair is trading below its pivot point. It is likely to trade in a lower range as far as it remains below its pivot point. Short position is recommended with the first target at 0.8470. A break of this target will move the pair further downwards to 0.8430. The pivot point stands at 0.8560. In case the price moves in the opposite direction and bounces back from the support level, then it will moves above its pivot point. It is likely to move further to the upside. In that scenario, a long position is recommended with the first target at 0.8585 and the second target at 0.8620.
Resistance levels:
0.8585
0.8620
0.8650
Support levels:
0.8470
0.8430
0.84
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Performed by Ahsan Aslam, Analytical expert InstaForex Group © 2007-2014 |
Technical analysis of NZD/USD for July 30, 2014
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