Overview:
NZD/USD is expected to trade in lower range. It is supported by the kiwi demand on NZD/JPY cross amid reduced risk aversion and hawkish Reserve Bank of New Zealand's monetary policy stance. But NZD/USD gains are tempered by the positive dollar sentiment and concerns about the growth outlook in China; the kiwi sales on buoyant AUD/NZD cross. Daily chart is mixed as 5- and 15-day moving averages are advancing, but stochastics is bearish near overbought zone.
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. Short position is recommended with the first target at 0.8625. A breach of this target will move the pair further downwards to 0.8610. The pivot point stands at 0.8690. In case the price moves in the opposite direction and bounces back from support level, and then it moves above its pivot point, it is likely to move further to the upside. In that scenario, a long position is recommended with the first target at 0.8625 and the second target at 0.8610.
Resistance levels:
0.8725
0.8745
0.8780
Support levels:
0.8625
0.8610
0.8570
