Fundamental overview: NZD/USD is expected to consolidate with bearish bias after hitting a four-and-a-half year low at 0.7065 this morning. Financial markets in New Zealand were closed for a public holiday today. NZD/USD is undermined by speculation that the RBNZ would cut interest rates in coming months, diminished investor risk appetite, and soft dairy prices and kiwi sales on buoyant AUD/NZD and EUR/NZD crosses. But NZD/USD losses are tempered by softer USD sentiment 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.
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 0.7140. 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 0.7200 and the second target at 0.7270.
Resistance levels: 0.7200 0.7270 0.73
Support levels: 0.7090 0.7030 0.7