NZD/USD is expected to consolidate with bearish bias after hitting a three-day low of 0.7418 this morning. Kiwi sentiment is hurt after the New Zealand’s government announced a new capital gains tax on residential property investments which would pave the way for interest rate cuts in coming months. NZD/USD is also weighed by kiwi sales on buoyant AUD/NZD cross and weak dairy prices. But NZD/USD losses are tempered by the weaker dollar sentiment.
The daily chart is mixed as stochastics is bullish, but the MACD is in bearish mode.
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 0.7405. A break of that target will move the pair further downwards to 0.7335. The pivot point stands at 0.7500. 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 0.7560 and the second target at 0.76.
The material has been provided by InstaForex Company – www.instaforex.com