Fundamental Overview:
NZD/USD is expected to consolidate in a lower range after hitting a six-and-a-half month low at 0.8267 on Friday. It is supported by the weaker dollar sentiment after fewer-than-expected 142,000 increase in U.S. August non-farm payrolls (versus forecast +225,000). The unemployment rate slipped to 6.1% last month from 6.2% in July, in line with the forecast, but that came as the labor-force participation rate fell to 62.8% from 62.9% in July. USD/JPY also weighed by lower shorter-dated U.S. Treasury yields (2-year at 0.512% versus 0.536% late Thursday as the U.S. yield curve steepened, NZD-USD interest differential, Kiwi demand on soft EUR/NZD and GBP/NZD crosses, and on buoyant NZD/CHF cross. But NZD/USD upside is limited by the Kiwi sales on buoyant AUD/NZD cross and weak dairy prices.
Technical Comment:
The daily chart is mixed as MACD is bearish, 5 and 15-day moving averages are falling, but stochastics is turning bullish to the oversold zone.
Trading recommendations:
The pair is trading above its pivot point. It is likely to trade in a higher range as far as it remains above its pivot point. As long as the price is keeping above its pivot point, a long position is recommended with the first target at 0.8350 and the second target at 0.8390. In an alternative scenario, if the price moves below its pivot points, short positions are recommended with the first target at 0.8240. A break of this target would push the pair further downwards and one may expect the second target at 0.8190. The pivot point is at 0.8265.
Resistance levels:
0.8350
0.8390
0.8435
Support levels:
0.8240
0.8190
0.8175
The material has been provided by InstaForex Company - www.instaforex.com
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