NZD/USD is expected to consolidate as the market awaits the U.S. FOMC interest rate decision. NZD sentiment is boosted by the 2.4% rise in Fonterra’s GDT Price Index at the latest GlobalDairyTrade auction. NZD/USD is also supported by the weaker dollar sentiment, the kiwi demand on soft AUD/NZD cross and NZD-USD interest differential. But NZD/USD upside is limited by the kiwi sales on soft NZD/JPY cross amid increased investor risk aversion and contagion from weak Aussie.
The daily chart is mixed as the MACD histogram bars turned positive, but stochastics is neutral.
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 0.7695. A break of this target will move the pair further downward to 0.7660. The pivot point stands at 0.7775. 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. In that scenario, a long position is recommended with the first target at 0.7810 and the second target at 0.7835.
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