FxWirePro: NZD/USD back above 0.70 handle, minor recovery seen on improving risk sentiment

• NZD/USD halts downslide at 0.6963 levels and retakes the 0.70 handle as bid tone around the kiwi rises in mid-Asian session.
   
• Improving risk sentiment seen across markets, Asian stocks witness a relief rally ahead of the Fed outcome.
   
• Data-wise, New Zealand posted a larger-than-expected current account surplus of NZD1.306 billion (US$91 million) in Q1 2016. 
   
• On tap ahead in the day are PPI and industrial production data from the US docket, while NZ GDT price index along with the US EIA crude stockpiles report will be also closely eyed.
   
• Our previous call (http://www.econotimes.com/FxWirePro-NZD-USD-upside-likely-running-out-of-momentum-good-to-sell-rallies-221316) has almost hit targets.
   
• Today’s Fed meeting is likely to see increased volatility. Goldman Sachs expects the Fed could downgrade its long-run target rate by 25 bps to 3%. This would lead to a weaker USD.
   
• If the long-run target rate is left unchanged, it could signal Fed isn't re-evaluating policy normalization & could lead to a USD rally.
   
• The pair finds major resistance at 0.7025 and then at 0.7054 (double top) and support lies at 0.6925 (trendline).
   
• Break above 0.7054 could see gains upto 0.71 and then 0.7140 levels. On the flip side break below 0.6925 could drag the pair to 0.6866 levels.
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Recommendation: We recommend exiting at lows, fresh bets only after FOMC verdict.