The New Zealand dollar tried to rally on Wednesday but has fallen significantly. With this, the Federal Reserve interest rate decision will be in focus today.
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NZD/USD
The New Zealand dollar initially tried to rally a bit during the trading session here on Wednesday as the 50-day EMA and the psychologically important 0.58 level both came into the picture to cause a little bit of resistance. Keep in mind it's also the 50% Fibonacci retracement level from the selloff that we had experienced in June.
More importantly, later in the day we have a lot of noise just waiting to happen due to the Federal Reserve interest rate decision coming out of the Federal Reserve and its press conference, which is probably going to have even more influence. If the US remains hawkish, it's very possible that the New Zealand dollar could struggle here, sending us lower again.
Waiting for the Fed Decision
I do like shorting the New Zealand dollar; I don't like owning it at the moment. And it is worth noting that here recently during that recent surge we had tested the 200-day EMA and it offered resistance, so it all tied together quite nicely right along with the 61.8% Fibonacci retracement level despite the fact that they did everything they could to break out.
Whether or not we plunge from here is a completely different story, but I do think that there is a significant amount of weight upon this market, and that overhang will continue to be a bit of an issue for traders to pay attention to.
Overall, this is a market that, given enough time, I do think finds sellers, but I don't really want to get too aggressive, at least not until after we get away from the interest rate decision. Probably by the end of the day, we should see the true colors here.