NZD/USD is expected to trade with bullish bias. It is supported by kiwi demand on the soft AUD/NZD cross, kiwi demand on the buoyant NZD/JPY cross amid reduced risk aversion, and the comment of New Zealand Prime Minister John Key that the kiwi’s decline of 25% to US$0.6500 over the past 12 months was faster than expected. But NZD/USD gains are tempered by the soft dairy prices and expectations that the RBNZ will cut the cash rate by 25 bps to 3.0% this week.
The daily chart is mixed as 5- and 15-day moving averages are declining, but stochastics is turned bullish at oversold levels.
The pair is trading above its pivot point. It is likely to trade in a wider range as long as it remains above its pivot point. As long as the price holds above its pivot point, long positions are recommended with the first target at 0.6640 and the second target at 0.6670. In the alternative scenario, short positions are recommended with the first target at 0.6505 if the price moves below its pivot points. A break of this target is likely to push the pair further downwards, and one may expect the second target at 0.6465. The pivot point is at 0.6555.
Resistance levels: 0.6640 0.6670 0.6725
Support levels: 0.6505 0.6465 0.64
The material has been provided by InstaForex Company – www.instaforex.com