FxWirePro: NZD/USD extends break below major support at 0.6960, eyes trendline at 0.6770, stay short

• NZD/USD is extending downside for 2nd consecutive week, bias still bearish.
   
• The pair has hit edged higher from fresh 5-month lows at 0.6860, trading largely muted on the day at 0.6880 levels.
   
• Momentum studies bearish, RSI and Stochs biased lower. MACD supports downtrend.
   
• Kiwi continues to remain under pressure, is likely to extend weakness in the wake of the electoral results.
   
• Further, disappointing NZ trade balance data, which showed that the trade deficit widened more-than-expected weighs on the kiwi.
   
• We see scope for test of major trendline support at 0.6770 on break below 0.6817 (May 11 low).
   
• Bearish invalidation seen on retrace above 200-DMA at 0.7155.

Support levels - 0.6817 (May 11 low), 0.68, 0.6716 (61.8% Fib retrace of 0.61968 to 0.7558 rally)

Resistance levels - 0.69, 0.6918 (5-DMA), 0.7038 (38.2% Fib), 0.7077 (20-DMA)

Call update: Our previous call (http://www.econotimes.com/FxWirePro-NZD-USD-consolidates-break-below-070-handle-bias-lower-good-to-short-rallies-963553) is just short on TP2.

Recommendation: Bias lower, stay short for further downside.

FxWirePro Currency Strength Index: FxWirePro's Hourly NZD Spot Index was at -11.1128 (Neutral), while Hourly USD Spot Index was at 7.76624 (Neutral) at 1020 GMT. For more details on FxWirePro's Currency Strength Index, visit http://www.fxwirepro.com/currencyindex.

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