NZD/USD is expected to trade with bearish outlook. The pair is capped by a bearish trend line since March 30, which confirms a negative outlook. The downward momentum is further reinforced by the declining 50-period moving average. The relative strength index is also capped by a descending trend line since March 30. In addition, the upside potential should be limited by the key resistance at 0.7020.
Hence, as long as this key level is not surpassed, expect a further drop to 0.6975 and even to 0.6960 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 0.6975. A break below this target will move the pair further downwards to 0.6960. The pivot point stands at 0.7020. If 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 0.7035 and the second one at 0.7055.
Resistance levels: 0.7035, 0.7055, and 0.7070
Support levels: 0.6975, 0.6960, and 0.6925
