Nzdusd On Bearish Pad As Markets Await Fed

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Nzdusd On Bearish Pad As Markets Await Fed

NZD/USD On Path To 0.58 As Markets Await Fed's Decision

The NZD/USD appears to be heading towards the support zone located at 0.58 as the Friday session comes to an end. Earlier, the NZD/USD peaked at 0.5845 as the market players are now favoring the greenback.

This move of money towards the greenback and away from the NZD is a sign that the market's risk-off mood appears to be fading away.

If we look at the bigger picture, the Kiwi weakness has already pushed the pair to 11-month lows already. During Thursday's session, the NZD/USD touched the 0.5772 level, which is a sign that not everything is alright with the Kiwi economy.

In the USA, we had the PCE index, which was in line with the market's forecast. That's why the attention has now shifted towards the Fed's meeting. As per the analysts, the Fed will hold off, which means the chances of a rate hike are zero to none.

No Surprise Expected From Fed

But if the Fed decides to introduce a rate hike, it will take the markets by surprise and will further push the NZD/USD lower.

On New Zealand's front, we have the unemployment rate that is expected to go higher from a value of 3.6% to around 3.9%. In addition, the market is also forecasting a slowdown in hiring as well.

Overall, the number of new jobs in New Zealand will jump by 0.4% during Q3, which is a bad sign considering that Q2 showed a 1% increase.

The technical outlook of the NZD/USD shows that the pair faced rejection after approaching the 200 SMA (hourly chart). At the same time, the factors that support a bullish Kiwi continue to remain non-existent for now.

On the NZD/USD daily chart, the trend also shows downside pressure with the MACD printing values in the oversold area. Now, the main catalyst that will change the direction of the NZD/USD is the Fed's decision and the unemployment data from New Zealand.

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