Technical analysis of NZD/USD for August 12, 2016

Overview:

• The NZD/USD pair dropped sharply from the level of 0.7324 towards 0.7187. Now, the price is set at 0.7195. On the H4 chart, the resistance is seen at the levels of 0.7244 and 0.7280. Volatility is very high for that the NZD/USD pair is still expected to be moving between 0.7200 and 0.7138 in coming hours. In the short term, we expect the NZD/USD pair to continue to trade in a bearish trend from the new resistance level of 0.7200 to form a bearish channel. Also, it should be noted that major resistance levels are seen at 0.7244 and 0.7280, while immediate support is found at 0.7182. According to the previous events, the pair is likely to move from 0.7182 towards 0.7138. Moreover, the daily strong support is seen at 0.7138. If the NZD/USD pair is able to break out the level of 0.7138, the market will decline further to 0.7039. So, a breakout of that target (0.7138) will move the pair further downwards to 0.7039. Overall, we still prefer the bearish scenario which suggests that the pair will stay below the zone of 0.7200 – 0.7180 today.
  On the contrary, in case a reversal takes place and the NZD/USD pair breaks through the resistance level of 0.7280, then a stop loss should be placed at 0.7330.

The material has been provided by InstaForex Company – www.instaforex.com
Source: Instaforex.com