Fundamental Overview:
NZD/USD is expected to consolidate with a bearish bias after hitting a seven-month low at 0.8158 on Thursday. NZD sentiment is soft after the Reserve Bank of New Zealand lowered its forecast for the 90-bank bills to 4.0% in 2Q 2015 from its forecast of 4.5% in its June Statement, and said that current NZD exchange rate level remains unjustified and unsustainable. NZD/USD is also weighed by the narrowing NZD-USD interest differential and weak dairy prices. But NZD/USD losses are tempered by the Kiwi demand on soft AUD/NZD cross and profit-taking on short-NZD positions as market participants trim risk exposure before the weekend.
Technical Comment:
The daily chart is negative-biased as MACD is bearish, stochastics stays suppressed in the oversold zone, 5 and 15-day moving averages are falling.
Trading recommendations:
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 0.8120. A break of this target will move the pair further downwards to 0.8075. The pivot point stands at 0.8225. In case the price moves in the opposite direction and bounces back from the support level, then it will 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 0.8265 and the second target at 0.8305.
Resistance levels:
0.8265
0.8305
0.8345
Support levels:
0.8120
0.8175
0.8135
