NZD/USD Forex Technical Analysis – Commodity-linked Currency Supported by Safe-Haven Dollar Dump

The New Zealand Dollar is inching higher late Friday after rebounding from an earlier loss. The Kiwi was under pressure shortly after the release of a stronger-than-expected U.S. jobs report because it cemented expectations of another 75 basis-point rate hike at the Federal Reserve’s policy meeting later this month. The currency turned around, however, as the news also eased the chances of a recession, encouraging investors to dump safe-haven U.S. Dollar positions.

At 19:00 GMT, the NZD/USD is trading .6185, up 0.0008 or +0.12%.

The NZD/USD swung between losses and gains on Friday after data showed a bigger than expected increase in U.S. Non-Farm Payrolls in June.

Data released by the U.S. Labor Department showed Non-Farm payroll employment jumped by 372,000 jobs in June after surging by a revised 384,000 jobs in May. Economics had forecast employment to increase by 268,000 jobs.

The report also showed that unemployment remained at 3.6% for the fourth month in a row, matching economist estimates.

Demand for the commodity-linked currency rose but gains were limited as the data eased worries about the economy while also adding to concerns about aggressive interest ratehikes  by the Federal Reserve.

Daily NZD/USD

Short-Term Outlook

Trader reaction to the minor pivot at .6189 is likely to determine the direction of the NZD/USD into the close on Friday.

Bullish Scenario

A sustained move over .6189 will indicate the presence of buyers. If this creates enough upside momentum then look for an intraday surge into the long-term Fibonacci level at .6232. Overcoming this level will indicate the short-covering is getting stronger with another minor pivot at .6261 the next potential target.

Bearish Scenario

A sustained move under .6189 will signal the presence of sellers. This could lead to a retest of the recent minor bottom at .6125.

Taking out .6125 will put the NZD/USD in a position to continue toward its May 15, 2020 main bottom at .5921.

For a look at all of today’s economic events, check out our economic calendar.

This article was originally posted on FX Empire

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