NZD/USD Price Analysis: Discovers support near 0.6250 ahead of FOMC minutes

NZD/USD recovers from 0.6250 as the US Dollar turns sideways ahead of FOMC minutes.
The likelihood of an interest rate cut by the Fed in March 2024 has dropped slightly.
NZD/USD manages to sustain inside the Rising Channel chart pattern.

Sagar Dua FXStreet

The NZD/USD pair has rebounded after discovering buying support near 0.6250 on Wednesday. The Kiwi asset finds cushion as the US Dollar Index (DXY) is struggling for a direction ahead of the release of the Manufacturing PMI for December to be reported by the United States Institute of Supply Management (ISM) at 15:00 GMT and the Federal Open Market Committee (FOMC) minutes.

S&P500 futures remains subdued in the Asian session, portraying caution among market participants ahead of crucial US economic events. The USD Index consolidates around 102.20 after a sharp recovery as investors reconsider about risk sentiment.

Bets supporting an interest rate cut by 25 basis points (bps) by the Federal Reserve (Fed) in March 2024 have dropped. As per the CME Fedwatch tool, the likelihood of an interest rate cut in March has come down to 67% from 72% projected on Tuesday.

NZD/USD trades in a Rising Channel chart pattern on a four-hour scale in which each pullback is considered as a selling opportunity by the market participants. The Kiwi asset slips below the 50-period Exponential Moving Average (EMA), which indicates that the near-term upside bias has dampened for now. The broader appeal will remain bullish until the asset sustains in the upward-sloping channel.

The Relative Strength Index (RSI) (14) has slipped into the bearish range of 20.00-40.00. Fresh recovery would appear when the momentum oscillator will deliver a range shift move.

Investors should capitalize a mean-reversion move to near the lower portion of the aforementioned chart pattern, which is around 0.6235. This would result in a recovery move towards 13 December 2023 high at 0.6287, followed by January 2 high at 0.6335.

In an alternate scenario, a breakdown below December 18 low near 0.6200 would expose the asset to 12 December 2023 high at 0.6170 and 8 December 2023 low near 0.6100.

NZD/USD four-hour chart

NZD/USD

Overview
Today last price	0.6261
Today Daily Change	0.0010
Today Daily Change %	0.16
Today daily open	0.6251

Trends
Daily SMA20	0.6241
Daily SMA50	0.6088
Daily SMA100	0.6008
Daily SMA200	0.6093

Levels
Previous Daily High	0.6337
Previous Daily Low	0.6248
Previous Weekly High	0.641
Previous Weekly Low	0.6264
Previous Monthly High	0.641
Previous Monthly Low	0.6084
Daily Fibonacci 38.2%	0.6282
Daily Fibonacci 61.8%	0.6303
Daily Pivot Point S1	0.622
Daily Pivot Point S2	0.619
Daily Pivot Point S3	0.6131
Daily Pivot Point R1	0.6309
Daily Pivot Point R2	0.6368
Daily Pivot Point R3	0.6398

Author

Sagar Dua

FXStreet

Sagar Dua is associated with the financial markets from his college days. Along with pursuing post-graduation in Commerce in 2014, he started his markets training with chart analysis.

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