NZD/USD is expected to consolidate after hitting the five-year low of 0.6745 on Tuesday. It is undermined by the divergent monetary policy stances of the Reserve Bank of New Zealand and the US Federal Reserve, soft dairy prices, and kiwi sales on the buoyant AUD/NZD cross and positive dollar sentiment. But NZD/USD downside is limited by the improved risk sentiment.
The daily chart is still negative-biased as the MACD is bearish, stochastics stays suppressed at oversold levels. Five and 15-day moving averages are declining.
The pair is trading below its pivot point. It is likely to trade in a lower range as long as it remains below the pivot point. Short positions are recommended with the first target at 0.6725. A break of that target will move the pair further downwards to 0.6690. The pivot point stands at 0.6800. In case the price moves in the opposite direction and bounces back from the support level, it will move above its pivot point. It is likely to mo ve further to the upside. According to that scenario, long positions are recommended with the first target at 0.6825 and the second target at 0.6850.
Resistance levels: 0.6825 0.68500.6895
Support levels: 0.6725 0.6690 0.6650
The material has been provided by InstaForex Company – www.instaforex.com