Overview:
NZD/USD is trading in higher range. Kiwi sentiment was boosted by NZIER 1Q quarterly survey showing net 32% of firms in New Zealand now expecting business conditions to improve, its highest reading since March 2010, compared with 19% in the previous survey. NZD/USD is also underpinned by positive investor risk appetite; firmer commodity prices; NZD-USD yield gap; Kiwi demand on buoyant NZD/JPY as weak yen sentiment supports the cross; Kiwi demand on soft AUD/NZD cross and on buoyant NZD/CAD cross; Reserve Bank of New Zealand Deputy Governor Spencer saying central bank could raise the Official Cash Rate sooner than expected if housing prices continue to rise--most economists are not expecting RBNZ to raise interest rate from its current 2.5% until early 2014. Daily chart is positive-biased as MACD is bullish, while stochastics stays elevated at overbought, five- and 15-day moving averages are advancing.
Recommendation:
Buy above 0.8435 with upside targets at 0.851 and 0.8534.
Resistance levels:
R1 - 0.851
R2 - 0.8534 (Feb. 15 reaction high)
R3 - 0.8571 (Aug. 31, 2011 reaction high)
Alternative scenario:
Sell below 0.8435 with downside targets at 0.8398 and 0.836.
Support levels:
S1 - 0.8398 (Monday's low)
S2 - 0.8360 (April 2 low)
S3 - 0.8333-0.8323 band (March 26 low-March 25 low, near 100-day moving average)
