NZD/USD stays in upper-half of daily range above mid-0.68s post GDT auction
- GDT Price Index rises 1.7% in the latest auction.
- Housing starts and building permits rise in November in the U.S.
- US Dollar Index stays quiet below 97.
The NZD/USD started the day on a strong note on Tuesday and rose to a 5-day high of 0.6880 before going into a consolidation phase. Despite the second straight increase recorded in the bi-weekly GDT price index earlier in the session, the pair extended its sideways course and was last seen trading at 0.6860, adding 0.8% n a daily basis.
The data published by the ANZ showed that both the Activity Outlook Index and the Business Confidence Index in New Zealand showed strong improvements in December to provide a lift to the kiwi. Moreover, the broad-based USD weakness helped the pair continue to march higher.
However, with the housing starts and building permits data showing a strong recovery in November, the dollar recovered a small portion of its daily losses. Ahead of tomorrow's critical FOMC meeting, the US Dollar Index was moving sideways below the 97 mark in the NA trading hours.
- US: Housing starts rose 3.2% in November following October's 1.6% decline.
Previewing tomorrow's Fed announcements, "The Federal Open Market Committee (FOMC) is widely forecast to raise the Fed Funds rate 25 basis points to 2.5% after its scheduled two-day meeting on Wednesday, December 19th. The bank will also release its "Projections Materials" detailing the expected course of the US economy and interest rate policy over the next three years," FXStreet senior analyst Joseph Trevisani said.
- Federal Reserve Preview: Slowdown ahead.
Technical levels to consider
The pair could face the initial resistance at 0.6880 (daily high) ahead of 0.6965 (Dec. 4 high) and 0.7000 (psychological level). On the downside, supports are located at 0.6810 (daily low), 0.6775 (200-DMA) and 0.6670 (100-DMA).