NZD/USD struggling to build on momentum above 100-DMA

The NZD/USD pair maintained its bid tone for the third consecutive session, albeit was seen struggling to sustain / build on its momentum above 0.7200 handle.

Currently holding marginally above 100-day SMA, near 0.7210 region, the pair on Tuesday jumped to 4-week high before quickly retracing back to 0.7200 handle. On Wednesday, the pair regained traction but once again failed to extend bullish momentum beyond yesterday's multi-week highs as investors remained cautious ahead of the much awaited Fed's interest-rate decision later during NY trading session.

Following the US presidential elections, markets have been factoring a stronger US economic growth, which should lead to a faster pace of rate-hikes in 2017 and hence, focus would be remain on the accompanying rate statement. It would be interesting to see if the policymakers increase their Federal-funds rate projections, in-line with market expectations, which could turn out to be highly positive for the greenback and trigger a fresh leg of weakness for the major.

In case of a disappointment, the greenback is more likely to witness a sharp sell-off and assist the pair to build on to its momentum since the beginning of this month, from the very important 200-day SMA.

Technical levels to watch

From current levels, momentum above 0.7230-35 multi-week high resistance is likely to get extended towards 0.7260-65 resistance area before the pair eventually breaks through 0.7300 handle and aims towards testing its next major resistance near 0.7325-30 region. On the flip side, decisive break back below 0.7200 handle (100-day SMA) might continue to find support near 0.7175-70 area ahead of 50-day SMA support near 0.7150 region.
 

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