Fundamental overview:
NZD/USD is to trade with risks skewed lower. It is undermined by the improved dollar sentiment (ICE spot dollar index last 94.57 versus 93.77 early Wednesday) on stronger than expected U.S. January ISM non-manufacturing PMI of 56.7 (versus forecast 56.1). At the same time, investors remained upbeat on the U.S. labour market conditions ahead of the Friday's non-farm payrolls report despite a fewer than expected 213,000 increase in the ADP U.S. private sector jobs in January (versus forecast +240,000). The pair is also weakened by the kiwi sales on soft NZD/JPY cross amid subdued investor risk appetite. But the NZD/USD losses are tempered by the NZD-USD interest differential and the kiwi demand on soft AUD/NZD cross.
Technical comment:
The daily chart is mixed as the MACD is bearish, but stochastics is bullish at oversold levels.
Trading recommendations:
The pair is trading above its pivot point. It is likely to trade in a higher range as far as it remains above its pivot point. As long as the price is keeping above its pivot point, a long position is recommended with the first target at 0.7450 and the second target at 0.75. In an alternative scenario, if the price moves below its pivot points, short positions are recommended with the first target at 0.7280. A break of this target would push the pair further downwards, and one may expect the second target at 0.7220. The pivot point is at 0.7325.
Resistance levels:
0.7450
0.75
0.7550
Support levels:
0.7280
0.7220
0.7175
The material has been provided by InstaForex Company - www.instaforex.com
