The Kiwi carries on the slow and steady upside movement against the greenback on Wednesday, increasing the price of NZD/USD to more than 0.7930, ahead of the Fed Monetary Policy Statement.
Technical Analysis
Opened at 0.7916, the pair is currently being traded around 0.7937. On the upside, 0.7959-0.7973 is the critical resistance area that has stalled the pair on many occasions this October. Breaching this resistance, the pair will face the next resistance around 0.8000, the psychological number and the trend line resistance. Then there lies another very important resistance at 0.8073, the confluence of trend line and the 50-days SMA. Breaking this resistance means the pair will hit the September 2013 low.
On the downside, a support can be noted around 0.7800, the psychological number. Another major support lies around 0.7700, the psychological number and the low of September 29 and October 6. The bias will remain bullish as far as the 0.7700 support area is intact.
FED Monetary Policy
The Board of Governors of Federal Reserve will announce the interest rate decision on Wednesday. Analysts are expecting FED to retain the current interest rate and end the Quantitative Easing program. The exit from the QE will be seen as bullish for the US Dollar (USD) which could consequently spur bearish momentum in the price of NZDUSD
RBNZ Rate Decision
The Reserve Bank of New Zealand (RBNZ) is also due to announce its interest rate decision today. According to the forecast, the bank is likely to maintain the benchmark interest rate at 3.5% however it is to be noted that the Kiwi central bank is famous for surprises, so another rate hike might spur huge bullish rally in the pair.
Trade Idea
Considering the overall fundamental and technical outlook cautious behavior is suggested ahead of the risk events.
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