NZD/USD drops back below 0.7100 ahead of the FOMC

• Kiwi under pressure during the American session, losses ground across the board.
• NZD/USD sideways, still unable to consolidate above 0.7100.

The NZD/USD pair hit earlier at 0.7120, the strongest level since April 2018, and then reversed sharply, falling to 0.7068. Ahead of the FOMC decision it trades at 0.7080, slightly lower for the day.

The move lower took place amid a modest recovery of the greenback across the board and also by a weaker kiwi. The New Zealand dollar printed fresh lows with AUD/NZD hitting fresh one-month highs near 1.0700.

Market participants continue focusing on potential deals on Brexit and a new fiscal stimulus in the US. At 19:00 GMT the Federal Reserve will release its decision and a half-hour later, Jerome Powell will hold a press conference. During Thursday’s Asian session, Q3 GDP data from New Zealand is due.

Upside limited, range prevails

The NZD/USD pair continues to move sideways within a bullish trend. The upper limit of the consolidation range it the two-year high around 0.7120. The kiwi continues to be unable to consolidate above 0.7100. If it manages to do so, it would clear the way to more gains. On the flip side, the immediate support stands at 0.7060 and then at 0.7000. A close below 0.7000 would suggest a deeper correction.

Technical levels