NZD/USD is expected to consolidate with risks skewed higher after hitting a near-two-month low of 0.7314 this morning. NZD/USD is volatile this morning following mixed market’s reaction to RBNZ’s Financial Stability Report. NZD/USD is supported by the broadly weaker dollar undertone and NZD-USD interest differential. But NZD/USD gains are tempered by the heightened expectations for interest rate cuts from the Reserve Bank of New Zealand in coming months and kiwi sales on buoyant AUD/NZD cross, weak dairy prices and reduced investor risk appetite.
The daily chart is still negative-biased as the MACD and stochastics are bearish, although the latter is at oversold levels, five-day moving average is below 15-day moving average and is still declining.
The pair trads 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 0.7560 and the second target at 0.76. In the alternative scenario, short positions are recommended with the first target at 0.7405 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 0.7355. The pivot point is at 0.7460.
The material has been provided by InstaForex Company – www.instaforex.com