Technical analysis of NZD/USD for August 02, 2016

Technical analysis of NZD/USD for August 02, 2016

Overview:

The NZD/USD pair continues to rise from the level of 0.7138 in the long term. It should be noted that the support is established at the level of 0.7138 which represents the 50% Fibonacci retracement level on the H4 chart. The price is likely to form a major support in the same time frame. Accordingly, the NZD/USD pair is showing signs of strength following a breakout of the highest level of 0.7138. Since the trend is above the 50% Fibonacci level, the market is still in an uptrend. Overall, we still prefer the bullish scenario. So, buy above the level of 0.7138 with the first target at 0.7242 in order to test the daily resistance 1 and further to 0.7324. Also, it might be noted that the level of 0.7324 is a good place to take profit because it will form a double top. On the other hand, in case a reversal takes place and the NZD/USD pair breaks through the support level of 0.7138, a further decline to 0.7039 can occur which would indicate a bearish market.

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