NZD/USD is expected to consolidate with bearish bias after hitting a two-week low of 0.7390 on Wednesday. NZD sentiment is dented by the 10.8% decrease in Fonterra's GDT Price Index and 13.3% drop in an average price for whole milk powder to $2,538/mt at the latest Global Dairy Trade auction. NZD/USD is also weighed by the kiwi sales on soft NZD/JPY cross amid subdued investor risk appetite. But NZD/USD losses are tempered by negative dollar sentiment.
The daily chart is tilting negative as stochastics is falling from overbought levels, the MACD histogram bars are turning negative, a five-day moving average falling below a 15-day moving average, and bearish parabolic stop-and-reverse signal was produced on Wednesday.
The pair is trading below its pivot point. It is likely to trade in a lower range as far as it remains below the pivot point. Short positions are recommended with the first target at 0.7425. A break of that target will move the pair further downwards to 0.7390. 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, a long position is recommended with the first target at 0.7545 and the second target at 0.76.
Uitgevoerd door, Analytische expert
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