NZD/USD: correction stalling on 0.69 handle ahead of Fed

NZD/USD is stabilising below the 0.6920 and the 20 sma on the hourly chart at the same level. 

NZD/USD has been in free-fall since losing the 0.72 handle at the end February's business. The resurgence in the US dollar has hit the kiwi hard and the prices of dairy in decline are also a factor weighing on New Zealand's currency.  Meanwhile, the price is in consolidation as we await the outcome of the FOMC's two-day meeting this week after nonfarm payrolls report that the market believes has sealed the deal for another 0.25bps rate hike. 

Fed can hike this week - Nomura

NZD/USD 1-3 month: 

Analysts at Westpac explained that 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. "Additional, and more recent, negative factors have been weaker dairy prices plus the RBNZ’s emphatic reminders it is on hold for a long time."

NZD/USD levels

NZD/USD made a correction after the US jobs data at the end of last week and rallied from just below the 0.69 handle to 0.6947 marking the initial resistance on a continuation of the correction. (7th March low). A break 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 while 0.7245 marks a stronger area of resistance there after 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.