NZD/USD is expected to trade in a lower range. The kiwi sentiment is dented by the 2.2% drop in Fonterra's GDT Price Index and 0.5% drop in average price for whole milk powder to $2,390/mt at latest Global Dairy Trade auction. NZD/USD is also weighed by the positive dollar sentiment and speculation that the RBNZ would cut interest rate in the coming months. 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 0.7315. A break of that target will move the pair further downwards to 0.7270. The pivot point stands at 0.7410. 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 0.7450 and the second target at 0.75.
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