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Fundamental overview:
NZD/USD is expected to consolidate with a bullish bias after hitting a three-week high at 0.7554 on Tuesday. NZD sentiment is boosted by the 10.1% increase in Fonterra's GDT Price Index and 13.7% rise in average price for whole milk powder to $3,272/mt at latest Global Dairy Trade auction. NZD/USD is also supported by the weaker dollar sentiment, Kiwi demand on buoyant NZD/JPY cross amid reduced risk aversion and weak yen sentiment as well as Kiwi demand on soft AUD/NZD cross.
Technical comment:
The daily chart is positive-biased as MACD and stochastics are bullish, although latter is at overbought levels, five-day moving average is above 15-day moving average and is advancing.
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 0.7590 and the second target at 0.7625. In an alternative scenario, if the price moves below its pivot points, short positions are recommended with the first target at 0.7440. A break of this target would push the pair further downwards, and one may expect the second target at 0.74. The pivot point is at 0.7470.
Resistance levels:
0.7590
0.7625
0.7685
Support levels:
0.7440
0.74
0.7345
