FX.co ★ Technical analysis of NZD/USD for October 22, 2014

Fundamental overview:

NZD/USD is expected to trade in a lower range. It is undermined by the positive USD sentiment (ICE spot dollar index last 85.38 versus 85.01 early Tuesday) after higher U.S. Treasury yields (10-year at 2.227% versus 2.183% late Monday) and bigger-than-expected 2.4% increase in U.S. September existing home sales (versus forecast +1.0%). But NZD/USD losses are tempered by the Kiwi demand on buoyant NZD/JPY cross amid positive risk sentiment and NZD-USD interest differential.

Technical comment:
Daily chart is still positive-biased as MACD is bullish, stochastics stay elevated at the overbought zone, five-day moving average is above 15-day MA and is advancing.

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 0.7910. A break of this target will move the pair further downwards to 0.7880. The pivot point stands at 0.7985. 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 0.8015 and the second target at 0.8050.

Resistance levels:
0.8015
0.8050
0.8075

Support levels:
0.7910
0.7880
0.7840