- NZD/USD has retraced nearly 25% of the recent drop.
- Recovery could be short-lived if the Fed fails to match dovish expectations.
- New Zealand's growth rate likely ticked higher in the first quarter.
The sell-off in the NZD/USD has stalled ahead of the Federal Reserve's closely-watched policy decision later in the day.
The currency pair rose 0.52% on Tuesday, retracing nearly 25% of the drop from 0.6681 to0.6487 seen over the preceding seven trading days.
The NZD likely found takers on reports stating that China and the United States are rekindling trade talks ahead of next week's meeting between Presidents Donald Trump and Xi Jinping.
The recovery may gather pace later today if the US Federal Reserve exceeds dovish expectations. Currently, the market is fully priced in for two 25 basis point rate cuts by the end of the December FOMC meeting and a 50% chance of a third. If the Fed fails to meet market expectations, the NZD/USD will likely fall back to recent lows below 0.65.
Post-Fed, the focus would shift to New Zealand data, due at 22:45 GMT, which is expected to show the annualized growth rate ticked higher to 2.4% in the first three months of 2019 from 2.3% seen in the final quarter of 2018.
A weaker-than-expected GDP will likely reinforce dovish RBNZ (Reserve Bank of New Zealand) expectations and hurt the NZD. As of writing, the pair is trading largely unchanged on the day near 0.6530.
|Today last price||0.6528|
|Today Daily Change||-0.0001|
|Today Daily Change %||-0.02|
|Today daily open||0.6529|
|Previous Daily High||0.6538|
|Previous Daily Low||0.649|
|Previous Weekly High||0.6666|
|Previous Weekly Low||0.6487|
|Previous Monthly High||0.6684|
|Previous Monthly Low||0.6481|
|Daily Fibonacci 38.2%||0.652|
|Daily Fibonacci 61.8%||0.6508|
|Daily Pivot Point S1||0.65|
|Daily Pivot Point S2||0.6471|
|Daily Pivot Point S3||0.6452|
|Daily Pivot Point R1||0.6548|
|Daily Pivot Point R2||0.6567|
|Daily Pivot Point R3||0.6596|
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.