NZD/USD: job done by the bears, target S3 achieved ahead of non farm payrolls this week
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NZD/USD: job done by the bears, target S3 achieved ahead of non farm payrolls this week

  • NZD/USD bears have woken up and the bird has played catch up on Wednesday, falling into synch with the Aussie and dropping in broad-based dollar strength after entering the US session as the weakest currency on the bloc.
  • NZD/USD is trading at 0.6528, having traded at a high of 0.6594 and has made a low of 0.6525.  

NZD/USD had been eking out some demand at the start of the week, rising from 0.66 the figure to a high of 0.6627 which woke the bears up and pulled in supply to a new swing low of 0.6575. There was some strong taction there and the pair rallied up to 0.6610, (a lower high). The pair has been travelling to the downside ever since and collapsed through S1, S2 and is sliding below S3 at the time of writing and looking for an hourly close beneath it.  

US data has been the trigger today as markets continue to pile back into the dollar while there is virtually no reason to hold the antipodeans at this time. There are far too many macro risks that threaten the stability of world growth and the dollar offers that carry advantage with the Fed on track to continue to rais rates this and next year.  

Joseph Trevisani, Senior Analyst at FXStreet explained  the  “healthy growth in ADP employment will keep expectations intact for a robust September employment report on Friday with expectations reaching beyond the 188,000 consensus forecast.”  

Joseph also commented on the service sector data that continues to drive the U.S. economy to new heights:

“Record levels of business optimism combined with the very strong ADP report, point to a further acceleration in the already robust job market in Friday’s payroll report.”

There is a void of data now between today and Friday’s US nonfarm payrolls and if the ISM and ADP was anything to go by in terms of a prelude, we could be looking at an exceptionally healthy jobs report – coupled with year-end flows, that usually are supportive fo the greenback, the bird is well on its way towards a 100% retracement of the early Sep rally from 0.6503.

NZD/USD levels

The bird dropped below 0.66 the figure, (a 50% fibo extension level of the early Sep extension’s retracement down at 0.65 the figure to 0.6699, the 21st Sep high). There is support here but eyes are on the double bottom lows at 0.65 the figure – the short term RSIs are oversold, with some leeway towards 18 on the 4hr but the hourly are maxed out as is the ATR. Daily RSI offers room to target the 0.65 handle for sure in coming sessions.  

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