NZD/USD is headed for the .8100 handle, a level that’s about to make trading interesting for Kiwi bulls and bears.
As we can see on the daily chart, the psychological level has served as a good resistance in June and July and a solid support area in November and December last year. If NZD/USD reaches .8100, then this is the first time that the pair would test the level this year.
So far, all signs are currently in NZD/USD bears’ favor. Aside from a strong downtrend that isn’t showing signs of easing up, our SMAs are also pointing to further downward movement. The 50 SMA (dark blue) has just crossed below the 100 SMA (green) and it looks like the latter is about to cross below the 200 SMA (light blue).
One factor that could change NZD/USD’s direction is this week’s FOMC statement. Traders are looking for the Fed to give a more detailed forward guidance. If the Fed delivers on Wednesday, then we might see NZD/USD break below .8100 and head to .7750, the next major support level.
But if the central bank makes little changes to its policies and continues to dodge questions about its tightening schedule, then we might see NZD/USD pop up to at least the .8300 level.
To contact the reporter of this story; Jonathan Millet at email@example.com