FX.co ★ Technical analysis of GBP/JPY for August 1, 2014

Overview:

NZD/USD is expected to consolidate. NZD/USD is undermined by the increasing risk aversion, the positive dollar sentiment, weak dairy prices and continued impact from Reserve Bank of New Zealand Gov. Wheeler's comment last week that the Kiwi's strength is "unjustified and unsustainable" and hint of a pause in the RBNZ's rate-tightening cycle. But NZD/USD downside is limited by the NZD-USD interest differential and Kiwi demand on soft AUD/NZD cross and positions adjustment before the weekend. The daily chart is still negative-biased as MACD is bearish, stochastics is staying suppressed in the oversold zone, five and 15-day moving averages are declining.

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 0.8560 and the second target at 0.8585. In an alternative scenario, if the price moves below its pivot points, short positions are recommended with the first target at 0.8430. A break of this target would push the pair further downwards and one may expect the second target at 0.84. The pivot point is at 0.8460.

Resistance levels:
0.8560
0.8585
0.8620

Support levels:
0.8430
0.84
0.8375