Overview:
NZD/USD is expected to consolidate with bullish bias after hitting three-week high at 0.8627 this morning. NZD/USD is supported after Reserve Bank of New Zealand raised its cash rate by 25 bps to 3.25% and its accompanying statement was more hawkish than expected--RBNZ Gov. Wheeler said New Zealand's economic expansion has "considerable momentum" and inflationary pressures are expected to increase, signaling more rate increases in coming months. NZD/USD is also supported by Kiwi demand on soft AUD/NZD cross. But NZD/USD gains are tempered by the reduced investor risk appetite. Daily chart is positive-biased as MACD and stochastics are bullish, five-day moving average is above 15-day MA and is advancing.
Trading recommendation:
The pair is trading above its pivot point. It is likely to trade in a higher range as far as it remains above its pivot point. As far as the price is above its pivot point, a long position is recommended with the first target at 0.8710 and the second target at 0.8745. In an alternative scenario, if the price moves below its pivot points, short positions are recommended with the first target at 0.8560. A breach of this target will push the pair further downwards and one may expect the second target at 0.8525. The pivot point is at 0.8620.
Resistance levels:
0.8710
0.8745
0.8775
Support levels:
0.8560
0.8525
0.8475
