Technical analysis of NZD/USD for January 29, 2015 Market Analysis Review

Fundamental overview:
NZD/USD is expected to consolidate with bearish bias after hitting near a 4-year low of 0.7310 overnight as the Reserve Bank of New Zealand keeps its cash rate at 3.5% but removes any tightening bias from its statement and even opens the possibility of rate cut. "Future interest rate adjustments, either up or down, will depend on the emerging flow of economic data," says the RBNZ Governor Graeme Wheeler. NZD/USD is also weighed by the unexpected New Zealand December trade deficit of NZD159 million (versus forecast for surplus of NZD75 million), the positive dollar sentiment and the kiwi sales on soft NZD/JPY cross amid increased investor risk aversion and on buoyant AUD/NZD cross.

Technical comment:

The daily chart is negative-biased as bearish outside-day-range pattern was completed on Wednesday, the MACD is bearish, stochastics stays suppressed at oversold levels, 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 the pivot point. Short positions are recommended with the first target at 0.7235. A break of this target will move the pair further downward to 0.7210. The pivot point stands at 0.74. In case the price moves in the opposite direction and bounces back from the support level, it will move above its pivot point. It is likely to move further to the upside. According to that scenario, a long position is recommended with the first target at 0.7445 and the second target at 0.75.

Resistance levels:

0.7445

0.75

0.7580



Support levels:

0.7235

0.7210

0.7145

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