NZD/USD soars to monthly highs above 0.5980, weak USD

• NZD/USD advanced towards 0.5984, its highest level in September.
• The US Dollar is trading soft on the back of US yields retreating.

On Tuesday, the NZD/USD faced intense buying pressure, soaring to 0.5984, as the US Dollar is trading weak against most of its rivals ahead of the Federal Reserve (Fed) decision later in the session.

The Fed is widely expected to maintain its policy rate within the 5.25%-5.5% range, a decision largely priced into the markets. However, the focus will shift to the revised Summary of Economic Projections (dot plot) and Chair Jerome Powell's comments, where investors will look for clues regarding forward guidance. With concerns over rising oil prices and robust US economic activity, there's potential for a hawkish tone from the Fed, which could revive the US Dollar and halt the pair’s upward momentum.

On the data front, no relevant data will be released for either country during the session. For the rest of the week, investors will eye Trade balance data for New Zealand on Friday’s Asian session and S&P PMIs from September from the US during the American Session.

NZD/USD Levels to watch 

 According to the daily chart, the technical outlook for the NZD/USD remains neutral to bullish as the bulls are recovering ground. With an upward trend above its midline, the Relative Strength Index (RSI) points towards a bullish sentiment, while the Moving Average Convergence (MACD) histogram exhibits rising green bars. To add to that, the pair is above the 20-day Simple Moving Average (SMA), but below the 100 and 200-day, indicating that there is still some light for the bulls and that the bears have still more ground to cover

 Support levels: 0.5920 (20-day SMA), 0.5890, 0.5860.

 Resistance levels: 0.6000,0.6030, 0.6050.

NZD/USD Daily Chart