Overview:
NZD/USD is trading with bearish bias. It is undermined by the Kiwi sales in the NZD/JPY cross amid decreased investor risk appetite as concerns mount over China's banking system liquidity; weaker commodity prices. But the Kiwi sentiment is boosted by narrower-than-expected New Zealand September trade deficit of NZ$199 million (versus forecast for deficit of NZ$800 million). NZD/USD losses are also tempered by expectations that the Federal Reserve will continue its current pace of bond-buying well into 2014. Kiwi vulnerable to 0145 GMT October HSBC China flash manufacturing PMI data. Daily chart is negative-biased as MACD and stochastics are turning bearish.
Trading recommendation:
The pair is trading below its pivot point. It is likely to trade in a lower range as far as it remains below its pivot point. A short position is recommended with the first target at 0.8305 in view; a breach of this target will move the pair further downwards to 0.8260. The pivot point stands at 0.844. In case the price moves in the opposite direction, bounces back from support, and moves above its pivot point, the price is most favorably expected to move further to the upside. In that scenario a long position is recommended with the first target at 0.8475 and the second target at 0.852.
Support levels:
0.8305
0.826
0.82
Resistance levels:
0.8475
0.852
0.855
