FxWirePro: NZD/USD consolidates break below 200-DMA, caution ahead of FOMC and New Zealand Q3 GDP

NZD/USD chart on Trading View used for analysis

• NZD/USD is trading in an extremely narrow range on the day, bias remains bearish.
   
• The pair has retraced below 200-DMA on Friday's trade as traders fear a growing global economic slowdown.
   
• Technical indicators support weakness in the pair, Stochs and RSI are sharply lower.
   
• Major risk events for the pair this week could significantly influence price action.
   
• Makets await FOMC interest rate desciion (Wed), where the US Fed is widely expected to hike interest rates one last time in 2018.
   
• Analysts expect that the Fed will probably remove more of its forward guidance to increase its flexibility, with emphasis on data dependence.
   
• The Fed funds rate futures continue to price the chance of a rate hike this week around 75% with a March 2019 rate hike given a 30% chance.
   
• If the Fed retains hawkish bias, squashing expectations of 2019 rate hike pause, we could see major weakness in the pair.
   
• New Zealand Q3 GDP figures (due Wed) will drive price action if there is any significant surprise. Markets expect Q3 GDP to edge lower to 0.6% from 1.0% in the previous quarter.
   
• Next major support lies at 0.6755 (nearly converged 55 and 110 EMAs), while retrace above 200-DMA to see upisde resumption.

Support levels - 0.6761 (38.2% Fib), 0.6755 (nearly converged 55 and 110 EMAs)

Resistance levels - 0.6827 (21-EMA), 0.6842 (200-DMA)

For details on FxWirePro's Currency Strength Index, visit http://www.fxwirepro.com/currencyindex.