NZD/USD: consolidates at 0.6920/50 ahead of a key week for the greenback

Currently, NZD/USD is trading at 0.6924, down -0.01% on the day, having posted a daily high at 0.6927 and low at 0.6922.

FOMC: watching for forward guidance - UOB

NZD/USD is sidelined and huddled around the 20 hourly sma awaiting the FOMC decision and forward guidance.  The kiwi has been pressured of late with the resurgence of the dollar after a combination of hawkish Fed speakers and dairy prices knocked the bird of its 0.72 handle perch. Should there be a hawkish forward guidance from the statement and/or Yellen's presser, an extension of the downside would be expected with 0.6860 on the radar. "The Fed’s tightening cycle plus US fiscal expansion should maintain upside pressure on US interest rates and the US dollar, pushing NZD/USD down to 0.6900 or lower," explained analysts at Westpac.

NZD/USD levels

NZD/USD 0.6950 is the initial resistance area on a continuation of the correction, (7th March low). A break to the upside through there opens the door to 6th March high at 0.7045 and 1st March low 0.7098. There is a double bottom of potential resistance at 0.7130 on the 4hr chart in mid-Feb and late Fed business. For a tougher area of resistance we have 0.7245 as the late Jan/early Feb support and double top resistance Feb 16th and 23rd. A break to the downside targets 0.6860 as a tough support area.