NZD/USD is under pressure and is expected to extend its downside movement.The pair broke below its 20-period and 50-period moving averages and consolidated on the downside. The relative strength index is below its neutrality area at 50 and lacks upward momentum. Nevertheless, 0.7240 (previous low) represents a significant key support level, which should limit the downside potential. Meanwhile, the prices are capped by the descending 20-period and 50-period moving averages, which maintain strong selling pressure. Besides, the relative strength index is also capped by a falling trend line. To conclude, as long as 0.7270 holds on the upside, the pair is likely to return to 0.7175 and then to 0.7150.
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 0.7175. A break below this target will move the pair further downwards to 0.7150. The pivot point stands at 0.7270. 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 0.7315 and the second one, at 0.7350.
Resistance levels: 0.7315, 0.7350, 0.7400
Support levels: 0.7175, 0.7150 , 0.7100
