Fundamental overview: NZD/USD is expected to trade with bullish bias. It is underpinned by weaker dollar sentiment and NZD-USD interest differential. But tiwi sentiment is dented by the 4.3% drop in the Fonterra's GDT Price Index and 3.1% drop in an average price for whole milk powder to $2,309/mt at latest Global Dairy Trade auction. NZD/USD gains are also tempered by the speculation that the Reserve Bank of New Zealand would cut interest rates in coming months, kiwi sales on buoyant AUD/NZD cross, and diminished investor risk appetite.
Technical comment: The daily chart is mixed as the MACD is bearish, but stochastics is turning bullish at oversold levels.
The pair is trading above its pivot point. It is likely to trade in a wider range as long as it remains above its pivot point. As long as the price holds above its pivot point, long positions are recommended with the first target at 0.7210 and the second target at 0.7270. In the alternative scenario, short positions are recommended with the first target at 0.7080 if the price moves below its pivot points. A break of this target is likely to push the pair further downwards, and one may expect the second target at 0.7030. The pivot point is at 0.7120.
Resistance levels: 0.7210 0.7270 0.73
Support levels: 0.7080 0.7030 0.7