Overview:
The NZD/USD is expected to trade in higher range. It is supported by the Reserve Bank of New Zealand decision increased its key interest rate by 25 basis points to 2.75% and RBNZ Gov. Wheeler said that the pace of hikes won't change just because the central bank thinks the Kiwi is overvalued, while the bank's forecasts point to slightly more aggressive rate hikes than its prior forecasts in December. The NZD/USD was also buoyed by broadly weaker dollar undertone and the Kiwi demand on NZD/JPY cross amid improved risk tolerance as well as the Kiwi demand on soft AUD/NZD cross. The daily chart is positive-biased as bullish outside-day-range pattern was completed on Wednesday; the MACD is bullish, while stochastics stays elevated at overbought zone with five and 15-day moving averages are advancing.
Trading recommendation:
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 far as the price is above its pivot point, a long position is recommended with the first target at 0.8650 and the second target at 0.8680. In an alternative scenario, if the price moves below its pivot points, short positions are recommended with the first target at 0.8430. A breach of this target will push the pair further downwards and one may expect the second target at 0.840. The pivot point is at 0.8485.
Resistance levels:
0.8650
0.8680
0.8725
Support levels:
0.8430
0.84
0.8370
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