Overview:
NZD/USD is trading with risks skewed higher. The rate is supported by Kiwi demand on soft AUD/NZD cross; Kiwi demand on buoyant NZD/JPY as negative JPY sentiment supports on the cross; and NZD-USD yield gap. Daily chart is mixed as MACD is in bearish mode; but stochastic is turning neutral. In the long term breach above 0.8425 would expose upside to 0.8460 - 0.8465 (Wednesday's high - Feb. 5 high), then 0.8481 (Feb. 4 high), 0.8571 (Aug. 31, 2011, high), and 0.8840 (Aug. 1, 2011, high).
Preference:
Buy above 0.8335 with targets at 0.8365 and 0.89 in extension.
Resistance levels:
R1- 0.835
R2 - 0.8379-0.8388 band (Monday's high-Friday's high)
R3 - 0.8425
Alternative scenario:
Sell below 0.8335. Below 0.8335 look for further downside with 0.8305 and 0.829 as targets.
Support levels:
S1 - 0.8307 (Monday's low)
S2 - 0.8294-0.8290 (Thursday's low-Jan. 30 low)
S3 - 0.8278 (Jan. 28 low)
Technical comment:
The RSI lacks downward momentum.