Fundamental overview: NZD/USD is expected to trade with bearish bias. It is undermined by the positive dollar sentiment, soft dairy prices, and speculation that the RBNZ would cut interest rate in the coming months. But the kiwi sentiment is soothed by the larger-than-expected New Zealand April trade surplus of NZ$123 million (versus forecast NZ$98 million). NZD/USD losses are also tempered by the kiwi demand on the soft AUD/NZD cross and NZD-USD interest differential.
Technical comment: The daily chart is negative-biased as the MACD is bearish, stochastics stays suppressed at oversold levels, 5 and 15-day moving averages are falling.
Trading recommendations: 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 0.7185. A break of that target will move the pair further downwards to 0.7150. The pivot point stands at 0.7270. 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 0.730 and the second target at 0.7325.
Resistance levels: 0.73 0.7325 0.7355
Support levels: 0.7185 0.7150 0.71