NZD/USD is expected to consolidate with bearish bias after hitting almost the five-year low of 0.6874 on Wednesday. Kiwi sentiment is hurt by the weaker-than-expected New Zealand Q1 GDP growth of 0.2% on quarter (versus forecast +0.6%). NZD/USD is also weighed by the dovish Reserve Bank of New Zealand monetary policy stance, soft dairy prices, and kiwi sales on the buoyant AUD/NZD cross. But NZD/USD losses are tempered by the negative dollar sentiment and kiwi demand on the NZD/JPY cross amid reduced risk aversion.
Technical comment:
The daily chart is negative-biased as the MACD is bearish, stochastics stays suppressed at oversold levels. 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 long as it remains below the pivot point. Short positions are recommended with the first target at 0.69. A break of that target will move the pair further downwards to 0.6845. The pivot point stands at 0.7. 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 0.7030 and the second target at 0.7080.
Resistance levels: 0.7030 0.7080 0.7130
Support levels: 0.69 0.6845 0.68
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