NZDUSD has broken above the resistance around the .6000 major psychological mark then zoomed up to a high of .6226. Price has since retreated from these highs and could be due for a retest of the former ceiling.

The Fibonacci retracement tool shows additional levels where buyers might be waiting. The 38.2% Fib is close by at .6086, then the 50% Fib is closer to the trend line around .6042. The 61.8% level is at the .6000 handle and coincides with the 200 SMA dynamic inflection point that adds to its strength as support.

On the subject of moving averages, the 100 SMA is above the 200 SMA to indicate that the path of least resistance is to the upside. In other words, support is more likely to hold than to break. The gap between the indicators is widening to reflect strengthening bullish momentum.

Stochastic is on the move down but is closing in on the oversold region to signal exhaustion among sellers soon. Turning higher would confirm that buyers are taking over and could allow the rally to resume back to the swing high or higher.

RSI has more ground to cover before dipping to the oversold area to confirm that bearish momentum is fading, so the correction could keep going until it does.

NZDUSD could take cues from the FOMC decision, although the Fed is widely expected to keep policy unchanged for the time being. Still, any hawkish remarks from officials could mean upside for the dollar, as this might revive tightening hopes for early next year.

Note that the latest CPI report turned out slightly better than expected, as headline inflation showed a 0.1% uptick in price pressures instead of staying flat. The core CPI came in line with estimates of a 0.3% increase, keeping dollar traders on the lookout for optimism from the US central bank.

New Zealand has its quarterly GDP report lined up and a slower 0.2% expansion is set to follow the earlier 0.9% growth figure.