NZD/USD is expected to trade in a higher range. The pair has recorded a succession of higher tops and higher bottoms since June 1 and is holding on the upside. The rising 50-period moving average is playing a support role and maintains the upside bias. The relative strength index is above its neutrality level at 50 and lacks downward momentum. In addition, 0.7100 is playing a key support role, which should limit the downside potential.
As long as 0.7100 holds on the downside, look for a further upside towards 0.7150 and even 0.7170 in extension.
Graphics Explanation: The black line shows the pivot point; the present price above pivot point indicates the bullish position and below pivot points indicates the short position. The red lines shows the support levels and the green line indicates the resistance levels. These levels can be used to enter and exit trades.
At present, the pair is trading above its pivot point. It is likely to trade in a higher range as long as it remains above its pivot point. Therefore, long positions are recommended with the first target at 0.7150 and the second one at 0.7170. In the alternative scenario, short position is recommended with the first target at 0.7080 if the price moves below its pivot points. A break of this target is expected to push the pair further downwards, and one may expect the second target at 0.7055. The pivot point lies at 0.7100.
Strategy : BUY at dips, Stop Loss: 0.7100, Take Profit: 0.7170
Resistance levels: 0.7150, 0.7170, and 0.7200
Support levels: 0.7080,0.7055, and 0.7005
The material has been provided by InstaForex Company - www.instaforex.com