Fundamental overview: NZD/USD is expected to consolidate with soft tone. It is undermined by kiwi sales on buoyant AUD/NZD and EUR/NZD crosses, speculation that the Reserve Bank of New Zealand would cut its interest rates in coming months, and lower dairy prices. But NZD/USD losses are tempered by weaker dollar sentiment, NZD-USD interest differential, and improved investor risk appetite.
Technical comment: The daily chart is mixed as the MACD is bearish, but stochastics is bullish at oversold levels. Iinside-day-range pattern was completed on Wednesday.
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 0.7210 and the second target at 0.7270. In the alternative scenario, short positions are recommended with the first target at 0.7080 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 0.7030. The pivot point is at 0.7120.
Resistance levels: 0.7210 0.7270 0.73
Support levels: 0.7080 0.7030 0.7
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