23.05.201408:20 Forex Analysis & Reviews: Technical analysis of NZD/USD for May 23, 2014

Long-term review

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Overview:

NZD/USD is expected to consolidate. It is supported by the Kiwi demand on NZD/JPY cross amid reduced risk aversion, NZD-USD interest differential, reduced concerns over China's economy and positions adjustment before weekend. But NZD/USD upside is limited by the broadly firmer USD undertone. Daily chart is still negative-biased as five-day moving average is below 15-day MA and declining, MACD and stochastics are bearish, although the latter is at oversold area, inside-day-range pattern was completed on Thursday.

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 0.8535. A breach of this target will move the pair further downwards to 0.8510. The pivot point stands at 0.8595. 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:
0.8535
0.8510
0.8475

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