NZD/USD is under pressure and expected to prevail its downside movement. The pair broke below a bullish channel and is currently testing the nearest support at 0.7075. In addition, the relative strength index is capped by a descending trend line. Besides, it broke below 30 (oversold area) without displaying any reversal signal. Besides, both the 20-period and 50-period moving averages are heading downwards. To sum up, as long as 0.7125 holds as the key resistance, the pair is likely to return to 0.7075 at first, and then to 0.7040.
Recommendation:
The pair is trading above its pivot point. It is likely to trade in a wider range as long as it remains above its pivot point. Therefore, long positions are recommended with the first target at 0.7240 and the second one, at 0.7265. In the alternative scenario, short positions are recommended with the first target at 0.7155 if the price moves below its pivot points. A break of this target is likely to push the pair further downwards, and one may expect the second target at 0.7115. The pivot point is at 0.7175.
Resistance levels: 0.7155, 0.7185 0.7240
Support levels: 0.7075, 0.7040, 0.7
The material has been provided by InstaForex Company - www.instaforex.com