Overview:
NZD/USD is expected to consolidate in a lower range after hitting a two-and-a-half year high at 0.8779 on Tuesday. It is undermined by the comment from RBNZ Gov. Wheeler that the Kiwi is overvalued and if the "currency remains high in the face of worsening fundamentals, such as a continued weakening in export prices, it would become more opportune for the Reserve Bank to intervene in the currency market to sell NZ dollars." NZD/USD is also weighed by the concerns over China's economy, Kiwi sales on rebounding AUD/NZD cross and decreased investor risk appetite. But NZD/USD losses are tempered by the negative dollar sentiment and NZD-USD interest differential. Daily chart is still positive-biased as MACD and stochastics are bullish, although the latter is at overbought zone, five-day moving average is above 15-day MA and is advancing.
Trading recommendation:
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 0.8635. A breach of this target will move the pair further downwards to 0.8595. The pivot point stands at 0.8705. In case the price moves in the opposite direction and bounces back from support level, and then it 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 at0.8780 and the second target at 0.8820.
Resistance levels:
0.8780
0.8820
0.8850
Support levels:
0.8635
0.8595
0.8550
The material has been provided by InstaForex Company - www.instaforex.com
For detail explanation and best discovery on market trends you may visit via Technical analysis of NZD/USD for May 07, 2014 . Thanks for your support on Technical analysis of NZD/USD for May 07, 2014
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