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NZD/USD: submerged below bearish moving averages eyeing S2

12/18/2018, 11:05:15 AMMarket Analysis
NZD/USD: submerged below bearish moving averages eyeing S2

NZD/USD has settled around the pivot on Monday with a narrow daily ATR of around 55 pips with the price within a sideways consolidative drift awaiting the FOMC decision today. 

"As markets wait for this week’s key event – the FOMC decision – currency ranges were fairly tight overnight. However, those tight ranges downplay the jitteriness that still exists. The NZD is at the whims of global themes here and may take quite a dovish turn from the Fed for new heights to be scaled," analysts at ANZ Bank explained. 

RBA minutes in the spotlight

For the day ahead, the minutes from the RBA Board’s 4 December meeting are due at 11:30am Syd/8:30am Sing/HK.

Governor Lowe’s statement after the meeting declared that the “Australian economy is performing well”, with “GDP growth to average around 3½ per cent over this year and next.” This was the day before the disappointing GDP report which we expect will prompt a downward revision to the RBA’s growth forecasts when released in February. Since the commentary on economic growth will be rather dated, there should be more interest in the housing market, including the statement’s line about “some lenders having a reduced appetite to lend,” analysts at Westpac explained.

NZD/USD levels

Support 0.6820 

Resistance 0.6980

NZD/USD slid below the 200-D SMA last week and a slide to the 38.2% retracement Fibo en route for a test of the 100-D SMA down at 0.6670 is not out of the question. S2 is located at 0.6227 ahead of 0.6676 as S3. On a break higher, the bird can head towards the 61.8% Fibo at 0.7048.