Overview:
NZD/USD is consolidating with bullish bias after hitting 17-month high of 0.8481 this morning. The rate is underpinned by comment from BNZ Gov. Graeme Wheeler that increasing fiscal deficits mean that monetary policy has to be tighter and interest rates higher. NZD/USD is also buoyed by positive investor risk sentiment; firmer commodity prices; NZD-USD yield gap; Kiwi demand on soft AUD/NZD cross; Kiwi demand on buoyant NZD/JPY as negative JPY sentiment supports the cross. Daily chart is positive-biased as MACD and stochastic are in bullish mode; five-day moving average are staging bullish crossover against 15-day MA.
Preference:
Buy above 0.841 with targets at 0.8475 and 0.851 in extension.
Resistance levels:
R1 - 0.8475
R2 - 0.851
R3 - 0.853
Alternative scenario:
Sell below 0.841. Below 0.841 look for further downside with 0.834 and 0.832 as targets.
Support levels:
S1 - 0.8341 (Thursday's low)
S2 - 0.832
S3 - 0.8290 (Wednesday's low)
Technical comment:
The pair remains supported by a rising trendline and is challenging its resistance.
