NZD/USD is expected to trade in a higher range as the bias remains bullish. The pair is consolidating and broke below its 20-period and 50-period moving averages. The relative strength index is below its neutrality level at 50. Nevertheless, a support base has formed around 0.7125, which should limit the downside potential. Additionally, the pair is supported by a rising trend line, which emerged on July 27. As long as this ascending trend line and the key support at 0.7125 is not broken, look for a technical rebound towards 0.7230 and even 0.7260 in extension.
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 0.7230 and the second one at 0.7260. In the alternative scenario, short positions are recommended with the first target at 0.7075 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 0.7055. The pivot point is at 0.7125.
Resistance levels: 0.7230, 0.7260, 0.7300
Support levels: 0.7075, 0.7055, 0.7010
The material has been provided by InstaForex Company - www.instaforex.com