06.05.201418:10 Forex Analysis & Reviews: Technical analysis of NZD/USD for May 06, 2014

Long-term review

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Overview:

NZD/USD is expected to consolidate with bullish bias after hitting three-week high at 0.8686 on Monday. It is supported by kiwi demand on buoyant NZD/JPY cross amid reduced risk aversion, kiwi demand on soft AUD/NZD cross, and NZD-USD interest differential. But NZD/USD gains are tempered by the concerns over China's economy and soft commodity prices. Daily chart is positive biased as MACD and stochastics are bullish, five-day moving average is above 15-day MA and it is advancing.

Trading recommendation:
The pair is trading above its pivot point. It is likely to trade in a higher range as far as it remains above its pivot point. As far as the price is above its pivot point, a long position is recommended with the first target at 0.8780 and the second target at 0.8820. In an alternative scenario, if the price moves below its pivot points, short positions are recommended with the first target at 0.8685. A breach of this target will push the pair further downwards and one may expect the second target at 0.8660. The pivot point is at 0.8720.

Resistance levels:
0.8780
0.8820
0.8850

Support levels:
0.8685
0.8660
0.8640

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