Overview:
NZD/USD is expected to consolidate with bullish bias after hitting a near-three-year high at 0.8794 this morning. It is supported by the soft dollar sentiment and Kiwi demand on weak AUD/NZD cross, hawkish Reserve Bank of New Zealand's monetary policy stance and widening NZD-USD interest differential. But NZD/USD gains are tempered by the waning investor risk appetite and profit-taking on long-Kiwi positions before weekend. Daily chart is positive-biased as MACD and stochastics are bullish, although the latter is at overbought zone, five and 15-day moving averages are 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 0.88 and the second target at 0.8835. In an alternative scenario, if the price moves below its pivot points, short positions are recommended with the first target at 0.87. A breach of this target would push the pair further downwards and one may expect the second target at 0.8680. The pivot point is at 0.8740.
Resistance levels:
0.88
0.8835
0.8860
Support levels:
0.87
0.8680
0.8655
