2016-10-06 12:12:58

Review and dynamics
The pair NZD/USD failed to go above resistance level of 0.7265 (ЕМА144 on the weekly chart) and after breaking down strong support level of0.7240 (ЕМА50 on the daily chart and Fibonacci 38.2% after the decline from the level of 0.8800, since July 2014) at the beginning of this week, started to go down to support levels of 0.7095 (ЕМА144 on the daily chart) and 0.7030 (ЕМА200).

The lower limit of the ascending channel has been also broken down on the daily chart.

On the weekly chart the pair NZD/USD remains in ascending channel, with the upper limit near the level of 0.7550 (Fibonacci 50.0%).

The lower limit of this channel is near important levels 0.7095 and 0.7030.

Our opinion
In the previous review, we have presumed that in case of breakdown of the support level of 0.7240 the pair may continue to decline to the level of 0.7030 (ЕМА200 on the daily chart and the lower line of the ascending channel on the weekly chart).

Breakdown of the level of 0.6860 (Fibonacci 23.6%) may cancel the upward trend.

It seems that our prediction is going to be true.

On the 4- hour, daily, weekly charts the indicators OsMA and Stochastic give signals to sell; on the monthly chart they also give signals for short positions.

Long positions will be advisable only if the pair goes back above the level of 0.7265 (ЕМА200 and the upper limit of the descending channel on 4-hour chart) into ascending channel on the daily chart.

Breakout of the resistance level of 0.7380 (ЕМА200 on the weekly chart) may trigger the rise in the pair in the ascending channel on the weekly char

However, this scenario is unlikely due to the difference in the monetary policy of the RBNZ and the US Fed.

Support levels: 0.7095, 0.7030, 0.6975, 0.6930, 0.6900 and 0.6860.
Resistance levels: 0.7240, 0.7265, 0.7380, 0.7420 and 0.7550.

Trading tips
Sell Stop: 0.7145. Stop-Loss: 0.7185. Take-Profit: 0.7095, 0.7030, 0.6975, 0.6930, 0.6900 and 0.6860.
Buy Stop: 0.7185. Stop-Loss: 0.7145. Take-Profit: 0.7240, 0.7265, 0.7380, 0.7420 and 0.7550.

To the lower limit of the channel at the level of 0.7030
To the lower limit of the channel at the level of 0.7030

Breakdown of the support level of 0.7240
Breakdown of the support level of 0.7240