NZD/USD is expected to trade in a wider range as the bias remains bullish. The pair broke below its 20-period and 50-period moving averages, while the relative strength index is below its neutrality level at 50. Nevertheless, a support base has formed around 0.7135 (August 3 low), which should limit the downside potential. Even though a continuation of the consolidation cannot be ruled out, its extent should be limited. As long as the key support at 0.7135 holds on the downside, look for further upside toward 0.7245 and 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 0.7245 and the second one, at 0.7260. In the alternative scenario, short positions are recommended with the first target at 0.7100, 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 0.7075. The pivot point is at 0.7135.
Resistance levels: 0.7245, 0.7260, 0.7295
Support levels: 0.7100, 0.7075, 0.7055
The material has been provided by InstaForex Company - www.instaforex.com