Overview:
NZD/USD is consolidating after hitting near-two-month low 0.8166 on Tuesday. The rate is undermined by remarks from RBNZ Gov. Wheeler that the Kiwi "remains elevated" and that new regulations on bank lending were anecdotally starting to have some impact on the housing market; positive dollar sentiment; Kiwi sales on NZD/JPY cross amid reduced investor risk appetite; weak commodity prices. But NZD/USD losses are tempered by Kiwi demand on soft AUD/NZD cross.
Technical comment:
Daily chart is still negative-biased as MACD and stochastics are bearish, although latter is at oversold; five- and 15-day moving averages are declining.
Trading recommendation:
The pair is trading below its pivot point. It is likely to trade in a lower range as far as it remains below its pivot point. A short position is recommended with the first target at 0.821 in view; a breach of this target will move the pair further downwards to 0.819. The pivot point stands at 0.829. In case the price moves in the opposite direction, bounces back from support, and moves above its pivot point, the price is most favorably expected to move further to the upside. In that scenario a long position is recommended with the first target at 0.8345 and the second target at 0.8395.
Resistance levels:
0.8345
0.8395
0.844
Support levels:
0.821
0.819
0.8175
