Overview:
NZD/USD is expected to consolidate after hitting the six-week high at 0.8736 this morning. It is supported by the Kiwi demand on NZD/JPY cross amid positive risk appetite, weaker dollar sentiment and hawkish Reserve Bank of New Zealand's monetary policy stance. But the Kiwi sentiment is dented after New Zealand 1Q GDP grew weaker-than-expected 1.0% quarter-on-quarter (versus +1.2% forecast). NZD/USD upside is also limited by the Kiwi sales on rebounding AUD/NZD cross. Daily chart is positive-biased as MACD is bullish, stochastics stays elevated at overbought zone, 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 0.8765 and the second target at 0.88. In an alternative scenario, if the price moves below its pivot points, short positions are recommended with the first target at 0.8635. A breach of this target will push the pair further downwards and one may expect the second target at 0.860. The pivot point is at 0.8675.
Resistance levels:
0.8765
0.88
0.8845
Support levels:
0.8635
0.86
0.8560
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