- NZD/USD pressured on Friday by both domestic and global themes.
- The upcoming week will be full of event risk.
- The Fed is expected to hike 25bp in December
NZD/USD is currently trading at 0.6796 and below the week's starting high of 0.6807 with top side pressures as the pair extends the correction of December's high of 0.6969.
The bird was pressured on Friday by both domestic and global themes while analysts at ANZ Bank noted that the upcoming week will be full of event risk. "The main event is likely to be the FOMC decision, although local Q3 GDP figures will drive price action if there is any significant surprise. There is also the ever-present impact of global risk sentiment."
The Fed is expected to hike 25bp in December but they may also remove guidance and slightly reduce the near-term dots. The markets are expecting the Fed to emphasize a data dependent and risk management approach. "Chair Powell will try to soothe markets by stressing that the Fed wants to extend the business cycle and thus will proceed slowly and deliberately. We expect a modestly dovish market reaction," analysts at TD Securities explained.
NZD/USD levels
- Support 0.6820
- Resistance 0.6980
NZD/USD slid below the 200-D SMA located at 0.6844 and is risking a slide to the 38.2% retracement Fibo en route for a test of the 100-D SMA down at 0.6670. S2 is located at 0.6227 ahead of 0.6676 as S3. On a break higher, the bird can head towards the 61.8% Fibo at 0.7048.
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