NZD/USD is expected to consolidate with bearish bias after hitting almost the five-year low of 0.6941 on Friday. It is undermined by the dovish Reserve Bank of New Zealand monetary stance, positive dollar sentiment, kiwi sales on the buoyant AUD/NZD cross, kiwi sales on the soft NZD/JPY cross amid increased investor risk aversion, and soft dairy prices. But NZD/USD losses are tempered by the NZD-USD interest differential.
The daily chart is negative-biased as the MACD and stochastics are bearish. 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 0.6950. A break of that target will move the pair further downwards to 0.690. The pivot point stands at 0.7065. 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 0.7130 and the second target at 0.7170.
Resistance levels: 0.7130 0.7170 0.7210
Support levels: 0.6950 0.69 0.9845
The material has been provided by InstaForex Company – www.instaforex.com