FxWirePro: NZD/USD capped below 23.6% Fib, break below 200-DMA to see further weakness

• NZD/USD recovery capped below 23.6% Fib retrace of 0.6780 to 0.7435 rally at 0.7281.
   
• The pair is trading 0.27% lower on the day at 0.7220. Price action has dipped into daily cloud, bias bearish.
   
• 200-DMA is strong support at 0.7177, we see further weakness only on break below.
   
• Technical indicators still support downside in the pair. We see bearish divergence from price action on RSI and Stochs which keeps scope for downside.
   
• Break below 200-DMA raises scope then for test of 0.7030 (61.8% Fib).
   
• On the upside, the pair finds strong resistance at 20-DMA at 0.7293, break above could invalidate bearish bias.

Support levels - 0.72, 0.7185 (38.2% Fib retrace of 0.6780 to 0.7435 rally), 0.7177 (200-DMA)

Resistance levels - 0.7230 (5-DMA), 0.7281 (23.6% Fib retrace of 0.6780 to 0.7435 rally), 0.7293 (20-DMA), 0.73

Recommendation: We prefer to wait for clear directional bias.

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