NZD/USD consolidates daily losses ahead of this week's RBNZ meeting

The NZD/USD pair, which broke below the 0.74 mark during the European morning, has been spending the second half of the day in a tight range consolidating its daily losses. As of writing, the pair is trading at 0.7360, losing 0.7% on the day.

Although the US Dollar Index struggled to find direction amid a lack of fresh fundamental catalysts on Monday, the kiwi remained under pressure ahead of this week's important RBNZ meeting. Markets don't expect any changes to the monetary policy, but the RBNZ could refrain from making any comments that could be seen hawkish during the press conference, which is scheduled at 22 GMT on Wednesday. Analysts at Nomura argue that the Bank may express some more explicit dovish leanings because of the subdued inflation backdrop and elevated NZD.

• NZ: Monetary policy remains clearly on hold - BNZ
• RBNZ is unanimously expected to leave the OCR at 1.75% - TDS

On the other hand, today's comments by the FOMC members failed to help the greenback build on its gains from Friday. St. Louis Fed President James Bullard reiterated the view that the Fed is likely to start shrinking its balance sheet soon and falling crude oil prices were impacting the inflation growth negatively. In the meantime, Minneapolis Fed President Neel Kashkari didn't comment on the monetary policy, and the participants largely ignored his remarks.

Technical outlook

0.7330 (50-DMA) could be seen as the first technical support ahead of 0.7260 (Jul. 17 low) and 0.7200 (psychological level/Jul. 11 low). On the upside, resistances align at 0.7415 (daily high), 0.7550 (psychological level) and 0.7560 (Jul. 27 high).