Fundamental overview:
NZD/USD is expected to trade in a lower range. Kiwi sentiment is dented by the lower-than-expected New Zealand 4Q CPI of -0.2% on-quarter (versus forecast -0.1%); weaker 1.0% rise in Fonterra's GDT Price Index at latest Global Dairy Trade auction versus the 3.6% increase at its previous auction. NZD/USD is also weighed by the broadly firmer dollar undertone and Kiwi sales on buoyant AUD/NZD cross. But NZD/USD losses are tempered by the subdued risk aversion and NZD-USD yield differential.
Technical comment:
Daily chart is negative-biased as MACD and slow stochastic indicators are 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 0.7620. A break of this target will move the pair further downward to 0.7605. The pivot point stands at 0.77. 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. According to that scenario, a long position is recommended with the first target at 0.7765 and the second target at 0.7815.
Resistance levels:
0.7765
0.7815
0.7845
Support levels:
0.7620
0.7605
0.7575
