Overview:

NZD/USD is expected to consolidate with bearish bias after hitting near-three-month low at 0.8415 on Tuesday. It is undermined by the sharp 8.5% drop in prices for whole milk powder New Zealand's main dairy export at Fonterra's GlobalDairyTrade auction overnight, Kiwi sales on buoyant AUD/NZD cross, and receding investor risk appetite. But NZD/USD losses are tempered by the improved outlook for China's economic growth, Kiwi demand on NZD/JPY cross amid weak yen sentiment, broadly softer USD undertone and NZD-USD interest differential. Daily chart is negative-biased as MACD and stochastics are bearish, although latter is at oversold zone, five and 15-day moving averages are declining.

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 0.84. A breach of this target will move the pair further downwards to 0.8350. The pivot point stands at 0.8475. 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 0.85 and the second target at 0.8515.

Resistance levels:
0.85
0.8515
0.8550

Support levels:
0.84
0.8350
0.83