NZD/USD: Choppy between 21/50-day EMA on FOMC day, eyes on Australia CPI for now

• NZD/USD stays range-bound between short-term EMAs on a key day.
• Trade/Brexit optimism prevails amid a lack of data/events at home.
• Third-quarter (Q3) inflation numbers from the largest customer will be in the spotlight.

With the global financial markets turning cautious ahead of the key day, NZD/USD changes modestly to 0.6355 at the start of Wednesday’s Asian session.

Although the Kiwi stood mostly positive by the end of Tuesday, prices trimmed major previous gains, earned through the increasing odds for the US-China trade deal in November, as investors keep profits locked prior to the eventful day.

In addition to the market’s inactivity, doubts surrounding the US-China “Phase One” final in Chile, on November 17, are also challenging the previous optimism spread from the US side. The reason is geopolitical problems/tension in Chile, as cited by Reuters.

With this, the 10-year US Treasury yields slip near one basis point from the recent rally to 1.85%.

Moving on, the presence of monetary policy meeting of the US Federal Reserve and preliminary reading of Q3 Gross Domestic Product pushes investors to the economic calendar while also making liable to keep an eye over the trade/Brexit headlines. However, immediate concern for the Kiwi traders is Australia’s Q3 Consumer Price Index (CPI) and the Reserve Bank of Australia’s (RBA) Trimmed Mean CPI data.

Forecasts suggest a soft print of headline inflation figure to 0.5% from 0.6% on QoQ basis while RBA Trimmed Mean CPI may not change from 0.4% prior on the Quarter-on-Quarter format.

Technical Analysis

While 21 and 50-day Exponential Moving Average (EMA) restrict the pair’s near-term moves between 0.6348 and 0.6370 respectively, buyers will look for a sustained break above 0.6440, which crosses 100-day EMA and the monthly top, to head further up towards 0.6500 mark. On the downside break of 0.6348, 0.6330 and 0.6300 could entertain sellers.