• US Dollar recovers strength during the American session, remains in recent range.
• FOMC to announce its decision at 18:00 GMT.
• NZD/USD near key support of 0.6185/90.

The NZD/USD broke below 0.6220 and slide to 0.6196, hitting a six-day low. The pair holds a negative bias ahead of the FOMC statement and as the dollar strengthens.

Next move depends on Powell and his mates

The Federal Reserve is expected to hike its key interest rate by three-quarters of a percentage point to 2.50% on Wednesday amid high inflation and signs of an economic slowdown. The statement (due at 18:00 GMT), particularly hints about the next steps, will be key for market reaction. Jerome Powell’s press conference will begin at 18:30 GMT.

The US dollar awaits the outcome of the meeting trading around the top of the two-week range across the board. The NZD/USD is hovering around 0.6200, falling for the second day in a row, still above the critical support seen at the 20-day Simple Moving Average at 0.6185/90. On the upside, a consolidation above 0.6250 would point to an extension of the recovery.  

The kiwi is among the worst performers on Wednesday hit by a rally in AUD/NZD and the caution across financial markets. The cross broke a critical resistance area at 1.1100 and jumped to test the four-year high at 1.1165/70.

Technical levels