Fundamental Overview:
NZD/USD is expected to consolidate with a bearish bias after hitting a six-and-a-half month low 0.8258 on Monday. It is undermined by the positive dollar sentiment (ICE spot dollar index last 84.31 versus 83.83 early Monday) after a research report released Monday from the Federal Reserve Bank of San Francisco said "evidence based on surveys, market expectations, and model estimates show that the public seems to expect a more accommodative policy than Federal Open Market Committee participants," triggering speculation that the Fed might sound less dovish than expected at next week's FOMC policy meeting and weak dairy prices. But NZD/USD losses are tempered by the Kiwi demand on buoyant NZD/JPY cross amid the weak yen sentiment, Kiwi demand on retreating AUD/NZD cross, NZD-USD interest differential and caution ahead of Reserve Bank of New Zealand's rate decision on Thursday.
Technical Comment:
The daily chart is negative-biased as MACD is bearish, stochastics stays suppressed at oversold zone, 5 and 15-day moving averages are falling.
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 0.8215. A break of this target will move the pair further downwards to 0.8180. The pivot point stands at 0.83. 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 0.8350 and the second target at 0.8390.
Resistance levels:
0.8350
0.8390
0.8435
Support levels:
0.8215
0.8180
0.8175
The material has been provided by InstaForex Company - www.instaforex.com
