Overview:

NZD/USD is expected to consolidate in a lower range after hitting a two-and-a-half year high at 0.8744 on Thursday. It is undermined by the Kiwi sales on soft NZD/JPY cross amid increased investor risk aversion and on buoyant AUD/NZD cross, concerns about the growth outlook in China and profit-taking on Kiwi-longs before weekend. But NZD/USD losses are tempered by the hawkish Reserve Bank of New Zealand's monetary policy stance and negative dollar sentiment. Daily chart is mixed as MACD is bullish, five and 15-day moving averages are advancing, but stochastics is turning bearish in overbought zone.

Trading recommendation:
The pair is trading below its pivot point. It is likely to trade in a lower range as far as it remains below its pivot point. Short position is recommended with the first target at 0.8610. A breach of this target will move the pair further downwards to 0.8570. The pivot point stands at 0.8705. In case the price moves in the opposite direction and bounces back from support level, and then it moves 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 0.8750 and the second target at 0.8775.

Resistance levels:
0.8751
0.8805
0.8850

Support levels:
0.8610
0.8570
0.8530