NZD/USD Price Analysis: Struggles for a confident move ahead of Fed policy
|- NZD/USD gathers strength for an ascending triangle pattern breakout ahead of Fed policy.
- The NZ economy is seen growing by 0.5% in Q2 vs. a contraction of 0.1%, recorded for the January-March quarter.
- The US Dollar Index remains subdued as the Fed is expected to keep interest rates unchanged at 5.25-5.50%.
The NZD/USD pair trades sideways in a narrow range of 0.5932-0.5944 in the European session. The Kiwi asset struggles for a direction as investors await the interest rate decision from the Federal Reserve (Fed), which is expected to remain unchanged.
S&P500 futures generated marginal gains in the London session. However, the overall market mood is quiet ahead of the Fed policy meeting. The US Dollar Index (DXY) remains subdued as the Fed is expected to keep interest rates unchanged at 5.25-5.50% but hawkish guidance cannot be ruled out.
Meanwhile, the New Zealand Dollar will remain in action ahead of the q2 Gross Domestic Product (GDP) data. As per the expectations, the NZ economy grew by 0.5% vs. a contraction of 0.1%, being recorded for the January-March quarter. The annual GDP is seen accelerating at a slower pace of 1.2% vs. the former reading of 2.2%.
NZD/USD attempts to deliver a breakout of the Ascending Triangle chart pattern formed on a two-hour scale. The horizontal resistance of the aforementioned chart pattern is plotted from September 6 high at 0.5942 while the upward-sloping trendline is placed from September 7 low at 0.5847.
The 20-period Exponential Moving Average (EMA) at 0.5932 is providing a cushion to the New Zealand Dollar.
Meanwhile, the Relative Strength Index (RSI) (14) attempts to shift into the bullish range of 60.00-80.00. If the RSI (14) manages to do so, a bullish momentum will get triggered.
Going forward, a decisive break above September 14 high at 0.5945 would expose the asset to August 23 high around 0.5980, followed by August 8 low around 0.6035.
On the contrary, a breakdown below September 13 low at 0.5980 would drag the major toward September 7 low at 0.5847. A slippage below the latter would expose the asset to the round-level support at 0.5800.
NZD/USD two-hour chart
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