NZD/USD is expected to trade in a 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 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 0.7200 and the second one, at 0.7170. In the alternative scenario, short positions are recommended with the first target at 0.7200 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 0.7170. The pivot point is at 0.7230.
Resistance levels: 0.7310, 0.7340, 0.7352
Support levels: 0.7200, 0.7170, 0.7145
The material has been provided by InstaForex Company - www.instaforex.com