NZD/USD is expected to prevail its downside movement. The pair broke below the lower boundary of a bearish channel, which confirms a negative view. In addition, the relative strength index is below its neutrality area at 50 and lacks upward momentum. Besides, both the 20-period and 50-period moving averages are heading downwards and play resistance roles. To sum up, as long as 0.7155 holds as the resistance, the pair is likely to drop to 0.7035 at first, and then even to 0.6965.
Recommendation:
The pair is trading below its pivot point. It is likely to trade in a lower range as long as it remains below the pivot point. Short positions are recommended with the first target at 0.7035. A break below this target will move the pair further downwards to 0.6965. The pivot point stands at 0.7155. 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, long positions are recommended with the first target at 0.7190 and the second one, at 0.7215.
Resistance levels: 0.7190, 0.7215, 0.7250
Support levels: 0.7035, 0.6965, 0.6915
The material has been provided by InstaForex Company - www.instaforex.com