Overview:
NZD/USD is expected to consolidate with bearish bias after hitting three-month low at 0.8400 on Wednesday. It is undermined by the weak dairy milk prices, Kiwi sales on buoyant AUD/NZD cross and positive USD sentiment. But NZD/USD losses are tempered by the Kiwi demand on NZD/JPY cross amid reduced risk aversion and NZD-USD interest differential. Daily chart is negative-biased as MACD and stochastics are bearish. Although the latter is at oversold zone, 5 day moving average is declining.
Trading recommendation:
The pair is trading below its pivot point. It is likely to trade in a lower range as far as it remains below its pivot point. Short position is recommended with the first target at 0.84. A breach of this target will move the pair further downwards to 0.8350. The pivot point stands at 0.8475. In case the price moves in the opposite direction and bounces back from support level, and then it moves above its pivot point, it is likely to move further to the upside. In that scenario, a long position is recommended with the first target at 0.85 and the second target at 0.8515.
Resistance levels:
0.85
0.8515
0.8550
Support levels:
0.84
0.8350
0.83
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