NZD/USD is expected to trade in lower range as the pair movement is capped by a negative trend line. The pair has been capped by a negative trend line, and is expected to look for a lower bottom. The descending 50-period moving average is also playing a resistance role, and the relative strength index lacks upward momentum. On the economic front, the U.S. Commerce Department reported that July retail sales were little changed in July as compared to June (vs. +0.4% expected). Excluding cars, sales declined 0.3% (vs. +0.1% expected). Another report showed that U.S. producer-price index (PPI) dropped 0.4% on month in July (vs. +0.1% expected), the biggest decline in almost a year. As long as 0.7210 is not broken above, the risk of a break below 0.7145 remains high.
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 0.7145. A break below this target will move the pair further downwards to 0.7105. The pivot point stands at 0.7210. If 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 0.7255 and the second one at 0.7310.
Resistance levels: 0.7255, 0.7310, 0.7380
Support levels: 0.7145, 0.7105, 0.7075
The material has been provided by InstaForex Company - www.instaforex.com