NZD/USD drops to 8-week lows, approaching 0.6500 mark ahead of FOMC

• NZD/USD remains depressed for the fourth consecutive session.
• Renewed USD exerted some pressure ahead of the Fed decision.

The NZD/USD pair lost some additional ground through the mid-European session on Wednesday and was last seen trading near eight-week lows, around the 0.6520 region.

The pair failed to capitalize on the previous session's attempted bounce and came under some renewed selling pressure on Wednesday, marking the fourth consecutive day of a negative move amid some renewed US dollar strength.

Bulls remained on the sidelines

The greenback remained well supported by concerns over the outbreak of the deadly coronavirus in China and Tuesday's upbeat consumer confidence data, though a weaker tone surrounding the US Treasury bond yields might cap further gains.

It will now be interesting to see if the pair is able to find any support at lower levels or continues with its ongoing bearish trajectory as traders start repositioning for Wednesday's key event risk – the latest FOMC monetary policy update.

The Fed is widely expected to leave interest rates unchanged and hence, the key focus will be on the accompanying rate statement, which might eventually turn out to be a key factor providing a fresh directional impetus for the major.

Technical levels to watch