NZD/USD saw kneejerk upside in response to the latest US labour market report, which on the face of its was much weaker than expectations. The pair nearly hit session highs in the 0.6810s but has since reversed back to below pre-data levels. It recently broke out to fresh annual lows under 0.6770, where it now trades with on the day losses of about 0.75%.  The 0.6800 area was a key support zone for NZD/USD, so a weekly close to the south of this level might be taken as a bearish signal by technicians heading into next week. Should technical selling momentum pile up, NZD/USD could tumble all the way down to the 0.6500s, the next area of major support.

BULLISH AND BEARISH CONDITIONS/ POSSIBILITIES :

The popularly known US NFP report is expected to show that the economy added 550K new jobs in November and that the unemployment rate dipped to 4.5% from 4.6%. The data will play a key role in influencing the USD and provide some impetus to the NZD/USD pair. Traders will further take cues from developments surrounding the coronavirus saga and the broader market risk sentiment to grab some short-term opportunities around the major.

In addition to a clear downside break of a 14-month-old rising support line around 0.6900, as sustained trading below 61.8% Fibonacci retracement (Fibo.) level of August 2020 to February 2021 upside, near 0.6860, also keeps NZD/USD bears hopeful. That said, the yearly low of around 0.6770 may act as immediate support to watch during the quote’s weakness. However, major attention will be given to a convergence of the descending support line from late August and 78.6% Fibo. level near 0.6710.

Kiwi Approaching the End of Channel

Dec 04 2021

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