FX.co ★ Technical analysis of NZD/USD for Sep 18, 2014

Fundamental Overview:

NZD/USD is expected to consolidate with bearish bias after hitting seven-month low 0.8073 on Wednesday.It is Undermined by the positive dollar sentiment (ICE spot dollar index last 84.78 versus 84.09 on early Wednesday) after the Federal Reserve reduced its monthly bond purchases by another $10 billion to $15 billion and retained its guidance that short-term interest rates will remain near zero for a "considerable time" after the bond-buying program is expected to end next month, but forecast a faster pace of rate increases in 2015 and 2016--the median forecast from Fed officials sees the fed-funds rate at 1.375% by the end of 2015, compared with a 1.125% forecast in June , wider-than-expected New Zealand 2Q current account deficit and less hawkish Reserve Bank of New Zealand's policy stance. But NZD sentiment are soothed by the stronger-than-expected New Zealand 2Q GDP growth of +0.7% on-quarter, +3.9% on-year (versus forecast +0.6% on-quarter, +3.8% on-year). Daily chart is negative-biased as MACD is bearish, stochastics is reverted to bearish mode at oversold zone, 5 and 15-day moving averages are falling. 

Technical Comment: 
The daily chart is mixed as MACD is bearish, 5 and 15-day moving averages are falling, but stochastics is turned bullish at the oversold zone, bullish parabolic stop-and-reverse signal hit on Tuesday.

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 0.8050. A break of this target will move the pair further downwards to 0.8. The pivot point stands at 0.8145. In case the price moves in the opposite direction and bounces back from the support level, then it will moves 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 0.8230 and the second target at 0.8265.  

Resistance levels: 
0.8230 
0.8265 
0.8305

Support levels: 
0.8050
0.8
0.7950