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NZD/USD reverses impulsive downward spike post-Fed

Discussion in 'Fundamental Analysis' started by FXStreet_Team, Dec 16, 2015.

  1. FXStreet_Team

    FXStreet_Team Well-Known Member Trader

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    FXStreet (Mumbai) - NZD/USD manages to recover Fed-decision backed losses and swung back higher as markets absorb the first Fed lift-off since 2006.

    NZD/USD bounces-off hourly 200-SMA at 0.6714

    Currently, the NZD/USD pair trades 0.27% higher at 0.6783, posing a solid recovery from lows struck at 0.6719 after the policy announcement. The Kiwi manages a pullback from a knee-jerk 80-pips downward spike somewhat and jumps back on the bids, reverting to 0.68 handle.

    The Fed hiked the target range for the Fed funds rate by 25bps as widely expected, although the policy statement revealed “only gradual increases” in the rates over the next few years. Markets viewed the Fed stance as largely dovish and hence, a renewed sell-off in the US dollar is seen as the Fed Chair Yellen’s speech is underway. The USD index dropped -0.21% to 97.97 levels.

    NZD/USD Levels to consider

    To the upside, the next resistance is located at 0.6800 (round number), above which it could extend gains to 0.6831 (Dec 15 High) levels. To the downside immediate support might be located at 0.6714 (1h 200-SMA) below that 0.6666 (20-DMA).
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