Overview:
NZD/USD is trading in lower range. The rate is underpinned by recovering commodity prices; rejuvenated risk appetite and by yen-funded carry trades amid improved investor risk sentiment (VIX fear gauge tumbled 19.17% to 13.96; S&P rose 1.43% overnight) on higher-than-expected 7.0% increase in U.S. housing starts (vs. +1.7% forecast) to five-year high of 1.04 million in March, bigger-than-expected 0.4% rise in U.S. March industrial production (vs. +0.2% forecast) and NZD-USD yield gap. But Kiwi sentiment was dented by lower-than-expected New Zealand 1Q CPI (up +0.4% on quarter vs. +0.5% forecast). Daily chart is still negative-biased as stochastics is falling from overbought; positive MACD is contracting.
Recommendation:
Sell below 0.851 with downside targets at 0.8435 and 0.84.
Support levels:
S1 - 0.843
S2 - 0.8394 (Tuesday's low)
S3 - 0.8373 (Monday's low).
Alternative scenario:
Buy above 0.851 with upside targets at 0.856 and 0.859.
Resistance levels:
R1 - 0.8555
R2 - 0.8581 (Monday's high)
R3 - 0.8642 (Friday's high)
