NZD/USD treads carefully ahead of major risk events

NZD/USD is currently trading at 0.6852 from a high of 0.6880 from the European session where the price moved into a sideways drift in early NY from the lows of 0.6842.

The bird was lifted by a rebound in business confidence while the GDT dairy auction resulted in prices up 1.7% overall, with whole milk powder up 0.3% (vs futures predictions of +3%), skimmed milk powder up 3.4%, and butter up 4.9%.

Wall Street manages to close in the green ahead of the FOMC

As for US data, the US housing starts rose 3.2% in November but analysts at Westpac argued that should not dispel concerns about the weakening housing sector: "The previous month was revised lower and all the gains came from the volatile multiples category; single-family housing starts fell 4.6%, making it three consecutive monthly declines."

FOMC outlook

Federal Reserve Preview: Slowdown ahead

Meanwhile, there will be market jitters as we approach the FOMC decision and local GDP tomorrow, which should make for a volatile playing field. The US dollar has been in the balance of whether the Fed will be making policy even more data dependent and whether we will see a decline in the 2019 median dot to two hikes from three. The Fed is expected to raise the target range for Fed funds to 2.25%-2.50%.

NZD/USD levels

Support 0.6820
Resistance 0.6980

NZD/USD is oscillating around the 200-D SMA where it slipped below last week with eyes on the 38.2% retracement Fibo en route for a test of the 100-D SMA down at 0.6670. However, so long a the bird can stablise here, prospects can be for a flight towards the 61.8% Fibo at 0.7048.

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