NZD/USD is expected to trade with a bearish bias as the key resistance is at 0.7120. The pair broke above its 20-period and 50-period moving averages, while the relative strength index is above its neutrality level at 50. Nevertheless, 0.7120 (Oct 7 and 10 bottoms) represents a significant key resistance level, which should limit the upside potential. Even though a continuation of the technical rebound cannot be ruled out, its extent should be limited. As long as 0.7120 holds on the upside, look for a further drop toward 0.7040. A break below this level would call for a further decline toward 0.7000.
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 0.7040. A break below this target will move the pair further downwards to 0.7000. The pivot point stands at 0.7120. In case 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 0.7145 and the second one at 0.7175.
Resistance levels: 0.7145, 0.7175, 0.7200
Support levels: 0.7040, 0.7000, 0.6950
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