Review and dynamics
At the beginning of August, the NZD/USD had broken out resistance level at 0.7240 (Fibonacci 38.2% of the upward correction to the decrease in pair from the level of 0.8800, since July 2014) but then declined, on the strong US labor market data released last Friday. Breakdown of the level 0.7240 was false.
Earlier in July, the NZD/USD reached the level of 0.7300, which is close to the resistance level and the line ЕМА144 on the weekly chart. However, later the pair fell again after the statement by RBNZ president Graeme Wheeler, who said that more monetary policy easing would be required. Since last September the pair NZD/USD continues to move in the ascending channel on the weekly chart with the upper limit near the level of 0.7380 (ЕМА200 on the weekly chart).
Interest rate reduction by 0.25% has already been incorporated in the price of the NZD. It is likely that the price will break down resistance levels 0.7240 and 0.7290 once again. In this case, the NZD/USD may go resistance levels of 0.7380 (ЕМА200 on the weekly chart) and 0.7550 (Fibonacci of 50.0%).
AS an alternative scenario the pair may break down support levels of 0.7115 (ЕМА200 and the lower limit of the ascending channel on 4-hour chart) and 0.7085 (ЕМА50 and the lower limit of the ascending channel on the daily chart) and continue to decline to support levels of 0.6975 and 0.6930 (ЕМА144, ЕМА200 on the daily chart, the lower limit of the ascending channel on the weekly chart). If the pair NZD/USD goes below the level of 0.6860 (Fibonacci 23.6%), downtrend in the pair NZD/USD may resume.
Support levels: 0.7115, 0.7085, 0.7050, 0.6975, 0.6930, 0.6900 and 0.6860.
Resistance levels: 0.7240, 0.7290 and 0.7320.
Sell Stop: 0.7160. Stop-Loss: 0.7210. Take-Profit: 0.7115, 0.7100, 0.7085, 0.6975, 0.6900 and 0.6860.
Buy Stop: 0.7230. Stop-Loss: 0.7180. Take-Profit: 0.7250, 0.7290, 0.7320 and 0.7400.
Breakout of the levels of 0.7240 and 0.7290 is required
In the ascending channel