Fundamental overview:
NZD/USD is expected to consolidate with a bullish bias after spiking to a six-day high at 0.7831 overnight following the Reserve Bank of New Zealand's decision to keep the official cash rate at 3.5%. NZD/USD jumped as the RBNZ unexpectedly reaffirmed its tightening bias in its policy statement after having dropped references to rate hikes in October, BNP Paribas says. NZD/USD is also supported by the broadly weaker dollar undertone and Kiwi demand on soft AUD/NZD cross. But NZD/USD gains are tempered by the increased investor risk aversion and weak commodity prices.
Technical Comment:
Daily chart is mixed as MACD is bearish, but stochastics is turned bullish at oversold levels.
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 0.7860 and the second target at 0.79. In an alternative scenario, if the price moves below its pivot points, short positions are recommended with the first target at 0.7660. A break of this target would push the pair further downwards and one may expect the second target at 0.7610. The pivot point is at 0.7730.
Resistance levels:
0.7860
0.79
0.7945
Support levels:
0.7660
0.7610
0.7565
The material has been provided by InstaForex Company - www.instaforex.com
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