NZD/USD breaks below 0.6900 as USD rallies after FOMC statement

The US dollar rose in the market, particularly against the Kiwi and the Aussie, after the release of the FOMC statement. The Federal Reserve, as expected, left interest rates unchanged at 0.75% - 1.00%. The central bank did not signal explicitly a June rate hike but left the doors open to more hikes. The US dollar index reached a 6-day high at 99.10. The DXY was testing the upper limited of the range to the last eight trading days. 

Fed leaves interest rates unchanged at May meeting

NZD/USD initially climbed to 0.6920 after the decision but then turned again to the downside. It broke under previous lows, and bottomed at 0.6873, hitting the lowest level since Monday. 

Levels to watch

From daily highs, the pair has fallen a hundred pips. On Asian hours the Kiwi outperformed boosted by the New Zealand Q1 jobs report. NZD/USD rallied to 0.6970 (20-day moving average). Not only if failed to hold to the jobs data gains, but it made a sharp reversal, exposing the pair to more losses. 

The area around 0.6850, that capped the decline on Monday and also last week, is the key support to watch in the short term. If the pair breaks below it would be trading at the lowest since June.