NZD/USD is expected to continue its downside movement. The pair broke below the lower boundary of its intraday “triangle” pattern since August 22, and is now testing its nearest support at 0.7200. Both the descending 20-period and 50-period moving averages are playing resistance roles, which should limit the upward attempts. The relative strength index is bearish, without showing any reversal signal. Hence, as long as 0.7290 holds on the upside, the pair is likely to drop to 0.7205 and then to 0.7180 in extension.
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 0.7205. A break of this target will move the pair further downwards to 0.7180. The pivot point stands at 0.7290. 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 0.7340 and the second one, at 0.7380.
Resistance levels: 0.7340, 0.7380, 0.7410
Support levels: 0.7205, 0.7180, 0.7120
The material has been provided by InstaForex Company – www.instaforex.com