Fundamental overview:
NZD/USD is expected to consolidate with a bearish bias after hitting a two-and-a-half year low at 0.7546 on Wednesday. It is undermined by the lower-than-expected New Zealand 4Q CPI which, together with the surprise interest rate cut by the Bank of Canada on Wednesday, raising chances that the Reserve Bank of New Zealand will leave rates on hold longer. NZD/USD is also weighed by the positive dollar sentiment. But NZD/USD losses are tempered by the subdued risk aversion.
Technical comment:
Daily chart is negative-biased as MACD and slow stochastic indicators are bearish; five and 15-day moving averages are declining.
Trading recommendations:
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 0.7450. A break of this target will move the pair further downward to 0.74. The pivot point stands at 0.7625. 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 0.7710 and the second target at 0.7785.
Resistance levels:
0.7710
0.7785
0.7810
Support levels:
0.7450
0.74
0.7375