Fundamental overview:
NZD/USD is expected to trade in a lower range. It is undermined by weak dairy prices, 1.5% on-quarter drop in New Zealand 3Q producer input prices and 1.1% drop in output prices. FOMC October meeting minutes released overnight were relatively uneventful after providing little insight into whether the pledge to keep rates low for a "considerable period" would be scrapped at the next meeting. Still, the Fed minutes reinforced views that the U.S. central bank remains on track to raise rates ahead of central banks in Europe and Japan. But NZD/USD losses are tempered by the Kiwi demand on buoyant NZD/JPY cross amid the weak yen sentiment and NZD-USD interest differential.
Technical comment:
Daily chart is mixed as MACD is bullish, but stochastics turned bearish near the overbought levels.
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 0.7820. A break of this target will move the pair further downwards to 0.7790. The pivot point stands at 0.7880. In case the price moves in the opposite direction and bounces back from the support level, then it will move above its pivot point. It is likly to move further to the upside. In that scenario, a long position is recommended with the first target at 0.7920 and the second target at 0.7965.
Resistance levels:
0.7920
0.7965
0.8005
Support levels:
0.7820
0.7790
0.7750
The material has been provided by InstaForex Company - www.instaforex.com
