Fundamental overview:
NZD/USD is expected to trade in a lower range. Mixed FX reaction this morning to NZ 3Q GDP data as on-quarter growth was stronger-than-expected at 1.0% (versus forecast +0.7%), but on-year growth was weaker-than-expected at +3.2% (versus forecast +3.3%). NZD/USD is undermined by the positive dollar sentiment. But NZD/USD losses are tempered by the Kiwi demand on buoyant NZD/JPY cross amid reduced risk aversion, firmer dairy prices and NZD-USD interest differential.
Technical Comment:
Daily chart is negative-biased as MACD and stochastics are turned bearish.
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 the pivot point. Short positions are recommended with the first target at 0.7660. A break of this target will move the pair further downward to 0.7625. The pivot point stands at 0.777. In case the price moves in the opposite direction and bounces back from the support level, it will move 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 0.7810 and the second target at 0.7835.
Resistance levels:
0.7810
0.7835
0.7870
Support levels:
0.7660
0.7625
0.7585
