NZD/USD surged more than 250 pips last week, however the pair now appears vulnerable and may resume downside movement towards 0.8050 or even below as per technical analysis.
At the moment of writing in Asian session spot is being traded near 0.8273 with immediate resistance seen around 0.8295, high of Friday, ahead of 0.8303 which is swing high of previous wave. A break above 0.8303 will turn bias into bullish. A daily close above 0.8303 may open doors for 0.8430.
On downside support can be noted around 0.8238 which is a confluence of 55 Daily Moving Average (DMA) as well as 50% fib level. A break below 0.8238 may threaten 0.8200 handle that is 61.8% fib support and psychological level, then the next target shall be 0.8138, 23.6% fib level and 200 DMA.
Commodity Channel Index (CCI) is retreating after hitting the overbought territory on daily chart which signals potential bearish reversal. Relative Strength Index (RSI) is flat around neutral territory tough that shows long moves might be in play soon. The only sign in favor of further upside movement is positive divergence being noted at four-hour chart. However, keeping in view the Lower Low (LL) in previous wave, a short position at current level with target around 0.8050 may be a good option.
Earlier on Friday, a report by labor department revealed that non-farm payrolls rose to 113K last month, far less than the median projection of analysts which was around 185K, but unemployment rate inched closer to the Federal Reserve’s 6.5% threshold with 6.6% reading in January. Another notable development last week was Reserve Bank of New Zealand’s decision of keeping benchmark interest rate or overnight lending rate or cash rate unchanged. In light of impressive economic outcomes shown by the Kiwi nation, analysts expect a rate rise as soon as next policy meeting.
* FXOpen International, Innovative Broker of 2022, according to the IAFT
This article represents the opinion of the Companies operating under the FXOpen brand only. It is not to be construed as an offer, solicitation, or recommendation with respect to products and services provided by the Companies operating under the FXOpen brand, nor is it to be considered financial advice.