NZD/USD is expected to consolidate with a bearish bias after hitting a near-five-year low at 0.7023 on Friday. NZD/USD is undermined by the positive dollar sentiment, dovish Reserve Bank of New Zealand monetary policy stance, and soft dairy prices. But NZD/USD losses are tempered by the NZD-USD interest differential.
Technical comment: The daily chart is negative-biased as 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 0.7050. A break of that target will move the pair further downwards to 0.7020. The pivot point stands at 0.7135. 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 move further to the upside. According to that scenario, long positions are recommended with the first target at 0.7170 and the second target at 0.7210.
Resistance levels: 0.7170 0.7210 0.7270
Support levels: 0.7050 0.7020 0.7
The material has been provided by InstaForex Company – www.instaforex.com