NZD/USD eases from 5-week tops, still above 50-DMA

   •  Positive momentum extends for the fourth consecutive session.
   •  USD weighed down by the latest political development.
   •  Focus remains on the much-awaited FOMC decision. 

The NZD/USD pair trimmed some of its early gains to 5-week tops but has still managed to hold in positive territory for the fourth consecutive session. 

The pair extended its recent rebound from 0.6825-20 support area and moved past 50-day SMA hurdle for the first time since Oct. 19 amid a modest US Dollar retracement. With investors looking past yesterday's stronger-than-expected US PPI print, news that a Democrat candidate has come out victorious in a hard-fought Senate race in Alabama kept the USD bulls on defensive.

The bullish momentum now seemed losing some steam as investors refrained from placing fresh bets ahead of the highly anticipated FOMC monetary policy decision, due to be announced later during the NY trading session on Wednesday. 

The Fed is widely expected to raise interest rates for the third time this year but investors would keenly scrutinize the accompanying statement for clues over the central bank's outlook for 2018, which would eventually help determine the next leg of directional move for higher-yielding currencies - like the Kiwi.

   •  FOMC plans to keep raising interest rates – Westpac

Heading into the key event risk, the latest US CPI print, along with the US President Donald Trump’s speech on the tax reform plan at the Department of the Treasury, in Washington, would also be looked upon to grab some short-term momentum play.

Technical levels to watch

Immediate hurdle remains near the 0.6960-65 region, above which the pair is likely to accelerate the up-move towards the key 0.70 psychological mark en-route its next major resistance near the 0.7055-60 area.

On the flip side, 0.6930 level now seems to protect the immediate downside, which if broken could drag the pair back towards the 0.6900 handle ahead of 0.6880-75 horizontal support.