NZD/USD Price Analysis: Bears Approaching Key Support Territory

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  • NZD/USD falls sharply after US NFP report.
  • Price stays testing a familiar group of daily support.

The NZD/USD has fallen after the rally in the US dollar on Friday due to a surprising result in US labor market data. Nonfarm payrolls in the US rose by 528,000 in July, according to data released by the US Bureau of Labor Statistics on Friday. This reading followed June’s rise of 398,000 (revised from 372,000) and beat market expectations of 250,000. The unemployment rate dropped to 3.5%.

Meanwhile, from a technical point of view, nothing is looking clear as price remains capped by a cluster of daily support and resistance. The pair has been trading in a wide range since breaking daily trend line resistance, failing to maintain a directional bias during the past two weeks of turmoil. The current structure and possible scenarios for the coming days are illustrated below.

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NZD/USD daily chart

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Price is testing a group of supports on the daily chart, with 0.6190 as a possible key structure which, if broken, will open up the risk of significant selling towards a test of the 0.61 figure. Below this figure, the target will be 0.5900. However, if the bulls manage to fend off the bears, there will be prospects for a move towards recent highs that will protect a breakout to the upside.

Source: Fx Street

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