NZD/USD - Key support levels, suitable for long term positions

NZD/USD - Weekly

Our expectations - The price is in broad consolidation between the area around 0.6800 and 0.77470. Current levels provide a good opportunity for traders traded in consolidation to take long positions, expecting more US dollar correction than kiwi. In the last 7 weeks, traders are more likely to buy than to sell. This is evidenced by strong Price Action last week. A bullish pin bar is available in the support area, indicating that the level is significant. Support is also 23.6% Fibonacci correction of the main downward trend starting in July 2014. 50 and 200SMA are beaded, but the price remains below 200 times, it's good not to just rely on them. DeMarker 14 forms a Double Bottom pointing upward from an over-sales area - positive for the price. If we take purchases from the current levels, it is good to move SL to 0.6700 levels. Despite the far stop, the Risk Return Ratio remains high - 1:4 to the previous peak.

Since the main move remains downward, we should not exclude a breakthrough in the downward support area as an alternative scenario. If that happens, it is good to comply and change the strategy to short positions. Since the level is of cardinal importance, it is very likely that we will observe Stop Hunting and false breakthroughs. For a downward break to be valid, we must have a whole bar closed under the support area.

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