- NZD/USD goes into consolidation following this week’s impressive rally.
- US Dollar Index continues to fluctuate above 96 ahead of Fed.
After rising to its highest level in more than two months at 0.6820 on Wednesday, the NZD/USD pair staged a technical correction and eased below the 0.68 mark on Thursday. As of writing, the pair was virtually unchanged on the day at 0.6785.
Earlier this week, the upbeat labour market from New Zealand, which showed that the unemployment rate fell to 3.9% in the third quarter from 4.5% recorded in the second quarter, boosted the demand for the kiwi. Additionally, the greenback came under a bearish pressure following the midterm election in the United States to help the pair extend its upsurge.
Previewing the FOMC meeting, “The November FOMC meeting should pass without much market impact, as the Fed should remain on track for another hike in December but not signal any change in policy,” said TD Securities analysts.
FOMC Preview: What 10 major banks are expecting from November meeting?
With investors waiting for the Fed’s interest rate decision and the monetary policy statement later in the NA session, the trading action quieted down on Thursday and the pair went into a consolidation phase. The data from the U.S. earlier today showed that initial weekly jobless claims came in at 214K to match the market expectation and failed to provide a fresh catalyst.
Technical levels to consider
The initial resistance for the pair aligns at 0.6820/30 (Nov. 7 high/200-DMA) ahead of 0.6860 (Jul. 9 high) and 0.6920 (Jun. 24 high). On the downside, supports could be seen at 0.6710 (Nov. 7 low), 0.6630 (100-DMA) and 0.6580 (50-DMA).
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