NZD/USD Price Forecast March 22, 2018, Technical Analysis

The Federal Reserve will release an interest rate policy decision during the day on Wednesday, and then will have a press conference. By the time we get into trading today, we will have had a significant decision as to the future the US dollar over the next several months. I suspect that traders will parse the statement and trying to figure out if there is going to be 3 or 4 interest rate hikes this year, as it is the most important question. If it appears that the Federal Reserve has not gotten more hawkish, that could lead traders to believe the 3 interest rate hikes will be the regiment, and that could send this market looking for the 0.7250 level. A clearance of the 0.72 level should suggest this is about to happen.

Alternately, if the market roles over, I think then we go looking towards the 0.70 level which of course is a large, round, psychologically significant number, but it is not the bottom of the overall consolidation that this pair has been in for months now. That honor falls to the 0.68 level underneath, so I think that could be a longer-term target if we get sudden US dollar strength. Remember, the currency markets will be very difficult to deal with for several hours after the announcement, so I would be very small in my trading position. However, the New Zealand dollar does tend to trend for long ranges, so this could give us a nice place to put a currency trade on. At this point, it becomes a question of where the US dollar is going, and much less a question of where the New Zealand dollar is going.