The New Zealand Dollar (NZD) extended upside movement against the US Dollar (USD) on Friday, increasing the price of NZD/USD to more than 0.8300 following the release of US employment reports. The bias remains bearish due to Lower Low in the recent correction wave on the daily chart.
As of this writing, the pair is being traded around 0.8328. A support may be noted near 0.8235, the 76.4% fib level ahead of 0.8050, the swing low of the last major dip as demonstrated in the following chart. The bias will however remain bearish as far as the 0.8515 resistance area is intact.
On the upside, the pair is expected to face a hurdle near 0.8350, the 61.8% fib level ahead of 0.8442, the 50% fib level and then 0.8474 that is the 200-Day Simple Moving Average (SMA). The pair has entered into oversold territory so a pullback might be in play before further upside rallies.
US corporations added just 142K new jobs in August, much lower than the expectations of 225K new jobs, a government report revealed today. Generally speaking, higher nonfarm payroll reading is considered positive for the US economy thus a worse than expected actual outcome spurred bullish momentum in the price of NZD/USD.
The rate of unemployment in the US ticked down to 6.1% in August as compared to 6.2% in the month before, meeting the median projection of 6.1%. Generally speaking, higher unemployment reading is considered negative for the economy thus a decline in the jobless rate figure provided some releases to the investment community.
Considering the overall technical and fundamental outlook, buying the pair around the current levels appears to be a good strategy in short to medium term, keeping a tight stop placed at the 0.8270 support area.
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