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Fundamental overview:
NZD/USD is expected to trade in a higher range after hitting a five-week low of 0.7182 Wednesday. NZD/USD is supported by the fact that the Reserve Bank of New Zealand kept its policy rate at 3.5% as widely anticipated and said "future interest rate adjustments, either up or down, will depend on the emerging flow of economic data." NZD/USD is also boosted by the NZD-USD yield differential, and kiwi demand on cross trades versus major currencies. The NZD/USD gains are tempered by the bullish dollar sentiment, subdued investor risk appetite and soft commodity prices.
Technical comment:
The daily chart is mixed as the MACD bearish, 5- and 15-day moving averages are falling, but stochastics is turned bullish at oversold levels. Bullish hammer candlestick pattern was completed on Wednesday.
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 0.7450 and the second target at 0.75. In an alternative scenario, if the price moves below its pivot points, short positions are recommended with the first target at 0.7255. A break of this target would push the pair further downwards, and one may expect the second target at 0.72. The pivot point is at 0.7315.
Resistance levels:
0.7450
0.75
0.7550
Support levels:
0.7255
0.72
0.7150
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