Overview:
The NZD/USD is to consolidate lower after hitting the 17-month high of 0.8532 on Friday undermined by contagion from a weak aussie, soft commodity prices and positive USD sentiment. The NZD/USD losses are tempered by the kiwi demand on soft AUD/NZD cross, the NZD demand on a buoyant NZD/JPY as weak yen sentiment supports the cross and the NZD/USD yield gap. The daily chart mixed as MACD has been bullish, but Stochastics is turning bearish near overbought. Bearish outside-day-range pattern completed Friday.
Preference:
Short positions below 0.849 with targets at 0.8395 and 0.833 in extension.
Support levels:
S1 - 0.8392 (Wednesday's low)
S2 - 0.8331 (Tuesday's day)
S3 - 0.8307 (February 11 low)
Alternative scenario:
Above 0.849 look for further upside with 0.8535 & 0.8575 as targets.
Resistance levels:
R1 - 0.8534 (Friday's high)
R2 - 0.8571 (August 31, 2011 high)
R3 - 0.86
Technical comment:
The RSI is bearish and calls for further downside.