NZD/USD is expected to consolidate with a bearish bias as markets await the FOMC policy decision. NZD sentiment is dented by a 1.3% drop in Fonterra's GDT Price Index and 0.1% drop in the average price for whole milk powder to $2,327/mt at latest Global Dairy Trade auction. NZD/USD is also weighed by the Reserve Bank of New Zealand dovish monetary policy, kiwi sales on buoyant AUD/NZD cross, and the weak euro. But kiwi sentiment is soothed by the larger-than-expected New Zealand Q1, current account surplus of NZ $662 million (versus forecast for NZ$190 million).

Technical comment:

The daily chart is negative-biased as the MACD and stochastics are bearish, although latter is at oversold levels; declining five- and 15-day moving averages.

The pair is trading below its pivot point. It is likely to trade in a lower range as long as it remains below the pivot point. Short positions are recommended with the first target at 0.69. A break of that target will move the pair further downwards to 0.6845. The pivot point stands at 0.7. In case the price moves in the opposite direction and bounces back from the support level, it will move above its pivot point. It is likely to move further to the upside. According to that scenario, long positions are recommended with the first target at 0.7030 and the second target at 0.7080.

Resistance levels: 0.7030 0.7080 0.7130

Support levels: 0.69 0.6845 0.68