NZD/USD is expected to trade with a bearish outlook. The pair has formed the Head and Shoulders pattern, and is reversing down. Both 20-period and 50-period moving averages are descending and should maintain a bearish bias. Meanwhile, the relative strength index has been capped by a negative trend line. As long as 0.7260 is not broken above, a break below 0.7195 seems likely.
The pair is trading below its pivot point. It is likely to trade in a lower range as long as it remains below the pivot point. Short positions are recommended with the first target at 0.7195. A break below this target will move the pair further downwards to 0.7175. The pivot point stands at 0.7260. If the price moves in the opposite direction and bounces back from the support level, it will move above its pivot point. It is likely to move further to the upside. According to that scenario, long positions are recommended with the first target at 0.7280 and the second one at 0.7300.
Resistance levels: 0.7230, 0.7300, 0.7325
Support levels: 0.7195, 0.7175, 0.7145
The material has been provided by InstaForex Company - www.instaforex.com
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