03.11.201416:07 Forex Analysis & Reviews: Technical analysis of NZD/USD for November 3, 2014

Long-term review

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Fundamental overview:

NZD/USD is expected to trade in a lower range. It is undermined by the positive USD sentiment (ICE spot dollar index last 86.91 versus 86.16 early Friday) as a jump in U.S. October ISM-Chicago PMI to one-year high of 66.2 in October from 60.5 in September and higher final University of Michigan October consumer sentiment index of 86.9 versus preliminary reading of 86.4 overshadowed a surprise 0.2% on-month drop in U.S. September personal spending (versus forecast +0.1%); higher U.S. Treasury yields (10-year at 2.335% versus 2.305% late Thursday) and Kiwi sales on buoyant AUD/NZD cross. But NZD/USD losses are tempered by the Kiwi demand on buoyant NZD/JPY cross amid positive risk sentiment and NZD-USD interest differential.

Technical comment:
Daily chart is negative-biased as stochastics is in a bearish mode, MACD is turning bearish.

Trading recommendations:
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 0.77. A break of this target will move the pair further downwards to 0.7670. The pivot point stands at 0.78. In case the price moves in the opposite direction and bounces back from the support level, then it will move 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 0.7880 and the second target at 0.7950.

Resistance levels:
0.78780
0.7950
0.8010
Support levels:
0.77
0.7670
0.76

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