04.11.201417:32 Forex Analysis & Reviews: Technical analysis of NZD/USD for November 4, 2014

Long-term review

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Fundamental overview:

NZD/USD is expected to consolidate with a bearish bias after hitting near-16-month low of 0.7697 on Monday. It is undermined by the positive USD sentiment (ICE spot dollar index last 87.29 versus 87.07 early Monday) after surprise rise in U.S. ISM manufacturing PMI to 59.0 in October--its highest level since March 2011--from 56.6 in September (versus forecast for drop to 56.0) and subdued investor risk appetite. But NZD/USD losses are tempered by the Kiwi demand on buoyant NZD/JPY cross amid weak yen sentiment and NZD-USD interest differential.

Technical comment:
Daily chart is negative-biased as MACD and stochastics are bearish, although the latter is in the oversold zone; five-day moving average is below 15-day MA and is declining.

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:
0.7880
0.7950
0.8010
Support levels:
0.77
0.7670
0.76

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