Overview:
NZD/USD is expected to consolidate with bullish bias after hitting one-week high at 0.8620 on Wednesday. It is supported by the larger-than-expected New Zealand February trade surplus of NZD818 million, its biggest since April 2011 (versus NZD622 million forecast), spillover from the Aussie strength, diminished concerns over China, and hawkish Reserve Bank of New Zealand's monetary policy stance. But NZD/USD gains are tempered by the kiwi sales on soft NZD/JPY cross amid increased investor risk aversion and kiwi sales on buoyant AUD/NZD cross. Daily chart is positive-biased as stochastics is bullish, 5- 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 0.87 and the second target at 0.8720. In an alternative scenario, if the price moves below its pivot points, short positions are recommended with the first target at 0.8585. A breach of this target will push the pair further downwards and one may expect the second target at 0.8565. The pivot point is at 0.8620.
Resistance levels:
0.87
0.8720
0.8740
Support levels:
0.8585
0.8565
0.8530
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