Fundamental overview:
NZD/USD is expected to consolidate with bullish bias after hitting two-and-a-half-year low of 0.7606 on Tuesday as the market awaits 20:00 GMT (Thursday 9 a.m. NZ time) the Reserve Bank of New Zealand's interest rate decision. The RBZ is expected to keep its policy rate at 3.5%. The kiwi sentiment is dented after Fonterra lowered its payout to dairy farmers from the previous forecast of NZ$5.30 to NZ$4.70. NZD/USD is also weighed by the kiwi sales on soft NZD/JPY cross amid reduced investor risk appetite. But NZD/USD losses are tempered by the broadly weaker USD undertone and NZD/USD interest differential.
Technical Comment:
The daily chart is negative-biased as the MACD is bearish, stochastics stays suppressed at the oversold levels, five-day moving average is below 15-day moving average and is 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 0.7770 and the second target at 0.7820. In an alternative scenario, if the price moves below its pivot points, short positions are recommended with the first target at 0.7610. A break of this target would push the pair further downwards and one may expect the second target at 0.7565. The pivot point is at 0.7660.
Resistance levels:
0.7770
0.7820
0.7860
Support levels:
0.7610
0.7565
0.7525
