NZD/USD is expected to consolidate with bearish bias after hitting the four-year low of 0.7127 on Thursday. It is undermined by the contagion from the weak Aussie after disappointing Australian Q1 capital expenditure data, diminished investor risk appetite, and the 1.7% drop in the New Zealand April building consents. The pair is alsoo bosted by soft dairy prices, the kiwi sales on the buoyant EUR/NZD cross, and speculation that the RBNZ would cut interest rate in the coming months. But NZD/USD losses are tempered by the softer USD sentiment, NZD-USD interest differential, and positions adjustment ahead of the weekend.
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.
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 0.7090. A break of that target will move the pair further downwards to 0.7030. The pivot point stands at 0.7210. 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 0.7270 and the second target at 0.730.
Resistance levels: 0.7270 0.73 0.7350
Support levels: 0.7090 0.7030 0.7