Fundamental Overview:
NZD/USD is expected to consolidate with a bearish bias. NZD/USD is undermined by Kiwi sales on soft NZD/JPY cross amid increased investor risk aversion and weak commodity prices. But NZD/USD losses are tempered by the lower U.S. Treasury yields (10-year at 2.566% versus 2.587% late Friday), weaker dollar sentiment (ICE spot dollar index last 84.68 versus 84.74 early Monday) after surprise 1.8% drop in U.S. existing home sales to 5.05 million in August (versus forecast of 1.0% increase to 5.2 million), fall in Chicago Fed's National Activity Index to minus 0.21 in August from plus 0.26 in July, Kiwi demand on soft AUD/NZD cross and NZD-USD interest differential.
Technical Comment:
The daily chart is negative-biased as MACD is bearish, stochastics stays suppressed in the 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 176.75. A break of this target will move the pair further downwards to 175.80. The pivot point stands at 178.75. 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 179.15 and the second target at 179.90.
Resistance levels:
0.8145
0.8180
0.82
Support levels:
0.8045
0.8
0.7975
The material has been provided by InstaForex Company - www.instaforex.com
