Overview:
NZD/USD is expected to consolidate with a bullish bias after hitting a two-month low at 0.8406 on Tuesday. It is undermined by the Kiwi sales on buoyant AUD/NZD cross, the waning investor risk appetite, the broadly firmer dollar undertone, weak dairy prices, reduced expectations of further rate hikes from the Reserve Bank of New Zealand this year as well as the official stance against strong Kiwi exchange rate. But NZD/USD losses are tempered by the NZD-USD interest differential. The daily chart is negative-biased as MACD is bearish, stochastics stays suppressed in the oversold zone, five and 15-day moving averages are declining.
Trading recommendations:
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 long as the price is keeping above its pivot point, a long position is recommended with the first target at 0.8485 and the second target at 0.8505. In an alternative scenario, if the price moves below its pivot points, short positions are recommended with the first target at 0.8395. A break of this target would push the pair further downwards and one may expect the second target at 0.8375. The pivot point is at 0.8445.
Resistance levels:
0.8485
0.8505
0.8530
Support levels:
0.8395
0.8375
0.8350
