NZD/USD is expected to trade with bearish bias after hitting the three-month high of 0.7744 on Wednesday. Kiwi sentiment is weak as the Reserve Bank of New Zealand held its interest rate at 3.5% as widely anticipated and kept the door open for a possible rate decrease, and Fonterra cut its forecast milk solid payout to 10,600 farmer shareholders to NZ$4.50 per kilogram of milk solids in the current season. NZD/USD is also weighed by kiwi sales on the buoyant AUD/NZD cross, soft dairy prices, and subdued investor risk appetite. But NZD/USD losses are tempered by the negative dollar sentiment.
The daily chart is mixed as the MACD is bullish, but stochastics is turning bearish near overbought levels.
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 0.7490. A break of that target will move the pair further downwards to 0.7435. The pivot point stands at 0.7585. 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 0.7665 and the second target at 0.7700.
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