Fundamental overview:
NZD/USD is expected to trade in higher range.It is buoyed by the negative dollar sentiment (ICE spot dollar index last 85.22 versus 85.72 early Monday) after Federal Reserve Bank of Chicago President Charles Evans said the "biggest risk" to the economy right now is that the central bank would raise interest rates sooner than it should. That follows his remarks on Saturday that a stronger dollar is a headwind as it will limit the Fed's ability to meet its inflation mandate and will impede growth and Kiwi demand on soft AUD/NZD cross and better-than-expected Chinese September trade data. But NZD/USD gains are tempered by the negative risk sentiment, weak dairy prices and threats of central bank intervention to weaken the NZD.
Technical comment:
Daily chart is positive-biased as bullish outside-day-range pattern was completed on Monday, MACD and stochastics are bullish, five-day moving average is rising above 15-day MA.
Trading recommendations:
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 long as the price is keeping above its pivot point, a long position is recommended with the first target at 0.7920 and the second target at 0.7975. In an alternative scenario, if the price moves below its pivot points, short positions are recommended with the first target at 0.7800. A break of this target would push the pair further downwards and one may expect the second target at 0.7760. The pivot point is at 0.7850.
Resistance levels:
0.7920
0.7975
0.8005
Support levels:
0.78
0.7760
0.7745
The material has been provided by InstaForex Company - www.instaforex.com
