23.10.201416:56 Forex Analysis & Reviews: Technical analysis of NZD/USD for October 23, 2014

Fundamental overview:

NZD/USD is expected to trade in a lower range. It is undermined by the lower-than-expected New Zealand 3Q CPI of +0.3% on-quarter (versus forecast +0.5%), the positive USD sentiment (ICE spot dollar index last 85.75 versus 85.39 early Wednesday) as U.S. Treasury yields inched higher (10-year at 2.219% versus 2.208% late Tuesday) after U.S. September CPI rose 0.1% in line with expectations, calming fears about the spread of deflation, Kiwi sales on buoyant AUD/NZD cross and Kiwi sales on soft NZD/JPY cross amid increased investor risk aversion. But NZD/USD losses are tempered by the NZD-USD interest differential.

Technical comment:
Daily chart is mixed as MACD is bullish, but stochastics is turned bearish at overbought zone.

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 0.7805. A break of this target will move the pair further downwards to 0.7775. The pivot point stands at 0.7885. 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 0.7915 and the second target at 0.7955.

Resistance levels:
0.7915
0.7955
0.7985

Support levels:
0.7805
0.7775
0.7735