Fundamental overview:
NZD/USD is expected to trade in higher range. Undermined by lower U.S. Treasury yields (10-year at 2.197% versus 2.305% late Friday) as investors pushed back expectations of the first Federal Reserve's rate increase in 2015 after Fed officials signaled a cautious approach to raising interest rates amid deteriorating global growth outlook, soft commodity prices and official stance against stronger NZD. But NZD/USD losses are tempered by the NZD-USD interest differential and NZD demand on soft GBP/NZD cross.NZD/USD gains are tempered by the broadly stronger USD undertone (ICE spot dollar index last 85.88 versus 85.22 early Tuesday) on relatively better U.S. economic performance versus that of other major economies.
Technical comment:
Daily chart is mixed as MACD and stochastics are in bullish mode, but bearish dark-cloud-cover candlestick pattern was completed on Tuesday.
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 0.7975 and the second target at 0.8050. In an alternative scenario, if the price moves below its pivot points, short positions are recommended with the first target at 0.7800. A break of this target would push the pair further downwards and one may expect the second target at 0.7760. The pivot point is at 0.7850.
Resistance levels:
0.7975
0.8050
0.8075
Support levels:
0.78
0.7760
0.7745
