Fundamental Overview:
NZD/USD is expected to consolidate with a bearish bias after hitting one-year low at 0.8040 on Tuesday. It is undermined by the Fonterra Co-Operative Group Ltd. lowering its forecast for payouts to farmers to NZ$5.30 per kilogram of milk solids from a prior forecast of NZ$6.00 and signaling further downside risk amid declines in global dairy prices , Kiwi sales on soft NZD/JPY cross amid increased investor risk aversion and Kiwi sales on rebounding AUD/NZD cross. But NZD sentiment are soothed by the narrower-than-expected New Zealand August trade deficit of NZ$472 million (versus forecast NZ$1.1 billion deficit). NZD/USD losses are also tempered by the NZD-USD interest differential.
Technical Comment:
Daily chart is negative-biased as MACD is bearish, stochastics stays suppressed at 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 0.8035. A break of this target will move the pair further downwards to 0.800. The pivot point stands at 0.8095. 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 0.8145 and the second target at 0.8180.
Resistance levels:
0.8145
0.8180
0.82
Support levels:
0.8035
0.800
0.7975
The material has been provided by InstaForex Company - www.instaforex.com
