Overview:
NZD/USD is expected to consolidate with bearish bias after hitting three-week low at 0.8557 on Tuesday.It is undermined by the Kiwi sales on soft NZD/JPY cross amid increased investor risk aversion, contagion from weak Aussie and concerns over China's economy. But NZD/USD losses tempered by Kiwi demand on soft AUD/NZD cross and NZD-USD interest differential. Daily chart is negative-biased as MACD and stochastics are bearish, five-day moving average staged bearish crossover against 15-day MA.
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. Short position is recommended with the first target at 0.8545. A breach of this target will move the pair further downwards to 0.8510. The pivot point stands at 0.8610. In case the price moves in the opposite direction and bounces back from support level, and then it moves above its pivot point, it is likely to move further to the upside. In that scenario, a long position is recommended with the first target at 0.8635 and the second target at 0.8655.
Resistance levels:
0.8635
0.8655
0.8695
Support levels:
0.8545
0.8510
0.8475
