- NZD/USD consolidates above the descending channel’s resistance on broad dollar weakness.
- The US jobs data was mixed while the strong jobs growth was outweighed by the disappointing unemployment.
NZD/USD has started out the week in consolidation of the bullish extension beyond the descending channel’s resistance where the US dollar and bond yields fell in response to the June employment report and soft wages growth. The bird is oscillating at 0.6840 at the time of writing.
The US jobs data was mixed while the strong jobs growth was outweighed by the disappointing unemployment and earnings numbers that sent the greenback lower across the board. At the same time, US stocks rallied while helped the bulls case for a break onto the 0.68 handle. The headlines read as 213k vs the expected 195k while the May level was revised higher to 244k (from 223k although average hourly earnings only rose by 0.2% m/m, remaining at 2.7% y/y vs the expected 0.3% and 2.8%.
Further to go in the near-term
“The kiwi’s positioning-related retracement continued late last week and it has popped back over 68 cents. It could very well have further to go in the near-term, although it is approaching levels that we’d start to consider fading,” analysts at ANZ Banking Corporation explained. Now that the US payrolls is out of the way, markets seem to be looking to take this opportunity to dial back on USD longs.
NZD/USD levels
0.6770 is the key support while 0.6850 remains as the first key upside target to break. A break there would alleviate the downside pressures some more and eyes remains towards 0.6920. However, on the wide, while below the key 200-month moving average resistance at 0.7007 longer term technicals remain bearish. 0.6786 is where the 10-D SMA is located, back in the descending channel, a few pips above last week’s closing daily stick’s low.
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