FxWirePro: NZD/USD edges lower from 5-week highs at 0.7220, good to buy dips

Technical Analysis:

• NZD/USD spikes to the highest level since December 14 on the back of a broad-based US dollar sell-off and an upbeat GDT price auction.
• The pair has broken 100-DMA which was capping upside in the previous sessions.
• The pair has edged lower from multi-week highs and is currently trading around 0.7197 levels.
• Ichi cloud top at 0.7187 is strong support, break below could see some weakness upto 0.7174 (50% Fib).

Fundamental Factors:

• Kiwi largely shrugs off slight recovery in dairy prices at the global dairy trade price auction held late yesterday.
• At last night’s GlobalDairyTrade auction, New Zealand dairy prices remained widely stable.
• GDT auction showed average prices climbed 0.6%, which offered relief following a 3.9% drop in the previous auction and strengthened the bid tone around the Kiwi. 
• In focus later during the day will be US CPI release. NZ annual inflation due 26th Jan will be another major influential factor.
• ANZ forecasts NZ CPI to lift to 1.2% – back in the RBNZ’s target band for the first time since Q3 2014.

TIME  TREND INDEX  OB/OS INDEX    

1H       Bearish          Neutral    
4H       Neutral           Neutral        
1D       Bullish            Neutral        
1W      Bullish            Neutral  

Support levels - 0.7187 (cloud top), 0.7147 (5-DMA), 0.71 (38.2% Fib of 0.7485 to 0.6862 fall)

Resistance levels - 0.7238 (Dec 14 high), 0.7247 (61.8% Fib), 0.7265 (Oct 20 high)

Recommendation: Good to go long on dips around 0.7190, SL: 0.7140, TP: 0.7220/ 0.7245/ 0.7265/ 0.73