Fundamental overview:
NZD/USD is expected to consolidate with a bullish bias after hitting a four-year low at 0.7174 on Tuesday. NZD sentiment is boosted by the 9.4% rise in Fonterra's GDT Price Index at the latest Global Dairy Trade auction. NZD/USD is also underpinned by the weaker USD sentiment, Kiwi demand on buoyant NZD/JPY cross amid positive risk sentiment, and Kiwi demand on soft AUD/NZD cross.
Technical comment:
Daily chart is mixed as MACD is bearish, 5 and 15-day moving averages are falling, but bullish outside-day-range pattern was completed on Tuesday, stochastics turned bullish at the oversold levels.
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 0.75 and the second target at 0.7590. In an alternative scenario, if the price moves below its pivot points, short positions are recommended with the first target at 0.7160. A break of this target would push the pair further downwards, and one may expect the second target at 0.71. The pivot point is at 0.7280.
Resistance levels:
0.75
0.7590
0.7635
Support levels:
0.7160
0.71
0.7040
