NZD/USD clings to gains beyond 50-DMA

Having posted a session low at 0.7115, the NZD/USD pair managed to recover early losses and is now seen building on to its momentum back above 50-day SMA.

Currently trading at fresh session peak near 0.7160 region, the pair gained fresh traction after Bill English was sworn in as New-Zealand's new Prime Minister, which receded fears of political uncertainty following last week's surprise exit of his predecessor John Key. Moreover, weekend oil output deal between OPEC and non-OPEC producers, provided an additional boost to investor sentiment and extended further support to the bid tone surrounding higher-yielding currencies - like the Kiwi.

The pair is also benefiting from an upbeat report on the NZ government by the US-based ratings agency, Moody’s Investors Service that showed government forecasts average annual GDP growth of 3.5% over 2017 and 2018 and lifted the pair back above 50-day SMA. 

This week's major focus, however, would remain on two-day Fed monetary policy meeting starting Tuesday and the outcome would help investors to determine the pair's near-term trajectory. The Fed is scheduled to announce its monetary policy decision later during NY session on Wednesday. In the meantime, Tuesday's Chinese economic data might provide some trading opportunities for short-term traders. 

Technical levels to watch

From current levels, 0.7175 level is likely to act as immediate resistance above which the pair seems to retake 0.7200 handle (100-day SMA) and head towards testing its next resistance near 0.7228-30 region (Nov. 11 high). On the downside, weakness back below 50-day SMA support near 0.7145 region now seems to drag the pair back towards session low support near 0.7115 before eventually dropping to 0.7100 handle.