By FXEmpire.com

The NZD/USD pair hasn’t been moving very much over the last few weeks. The Kiwi is certainly struggling with the recent economic conditions as the world tries to come to grips with the idea of the struggle in Europe, the fears of easing with several different banks, and this will more than likely have a great effect on commodity prices.

The Kiwi, being a commodity driven currency, is struggling to figure out where it wants to go next. The 0.82 level is obviously important as it has kept this pair from falling that far. The recent consolidation has been difficult for the longer-term trader, and it is because of this very problem that we can perhaps use this very fact to help us trade this pair for a longer-term move.

The breaking below of 0.80 could signal longer-term weakness, and this could send the pair much lower. The level is an obvious place to sell from if we get that close. The 200 day EMA is just below the current action in this pair on the daily chart, so we suspect that the path of least resistance is to the upside in this market. However, we would prefer to see the 0.83 level broken to the upside in order to go long. The upcoming FMOC meeting could provide some catalyst for further Dollar weakness, especially if the members mention anything relating to possible quantitative easing in the future.

The interest rate will be vital to what happens going forward in the Dollar’s future, and as long as the Fed seems “flat”, there is hope for the Greenback. The pair will greatly reflect the tone of the meeting, and as a result we figure this will be the pivotal catalyst going forward. The Wednesday announcement should move this market, and once we get that move, we can either go long above the 0.83 level, or sell below the 0.80 handle. Until one of these levels gives way, we can only be patient and wait for the signal to present itself.

Click here a current NZD/USD Chart.

Originally posted here