Overview:
NZD/USD is trading with risks skewed higher after advancing this morning to 0.8457 on Reserve Bank of New Zealand's widely-expected decision to keep its official cash rate at 2.5%. "There was a notable omission from the final policy paragraph - the sentence 'There are both upside and downside risks to this outlook' was omitted. This was interpreted as reducing the chance of a rate cut," says Westpac. NZD/USD also supported by improved risk appetite; NZD-USD yield gap; Kiwi demand on soft AUD/NZD cross; Kiwi demand on buoyant NZD/JPY as weak yen sentiment supports the cross. But NZD/USD upside limited by positive USD sentiment; weak commodity prices. Daily chart is still negative-biased as MACD and stochastics are bearish, although latter is at oversold; five-day moving average is below 15-day MA and falling.
Trading recommendations:
The pair is trading above its pivot point at 0.8456. The pair is likely to trade in higher range as far as it remains above its pivot point. As far as price is above its pivot point, it will be most favorably to trade in higher range and buy position is recommended above its pivot with first target at 0.8455 and second target at 0.8509. Short position below the pivot keep in view of the first target at 0.8405, breach of this target will further move the pair downward and expect the second target at 0.838. Pivot point stands at 0.844.
Resistance levels:
R1 - 0.848, R2 - 0.8509 (April 17 high), R3 - 0.8581 (April 15 high)
Support levels:
S1 - 0.8405, S2 - 0.838, S3 - 0.8359 (Tuesday's low)
