NZD/USD is under pressure. The pair is capped by a bearish trend line since July 14 and remains under pressure below the horizontal resistance at 0.7085, which should limit upward attempts. Both the Australian dollar and the New Zealand dollar were dragged by expectations of central banks cutting interest rates in August. AUD/USD plunged 1.2% to 0.7501 (day-low at 0.7473), and NZD/USD lost 0.9% to settle at 0.7047. Even though a continuation of the technical rebound cannot be ruled out, its extent should be limited. As long as 0.7085 holds as the key resistance, the pair is likely to drop to 0.7000. A break below this level would open the way to further weakness toward the horizontal support at 0.6975.
Recommendation:
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 0.7000. A break below this target will move the pair further downwards to 0.6975. The pivot point stands at 0.7085. 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 0.7125 and the second one, at 0.7155.
Resistance levels: 0.7125, 0.7155, 0.7190
Support levels: 0.7000, 0.6975, 0.6915
The material has been provided by InstaForex Company – www.instaforex.com
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