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Technical Analysis

NZD/USD Turns Lower From Trend Channel Resistance Following NFP Report


NZD/USD reversed lower in the North American session after a strong US jobs report. The pair is seen bouncing from prior support near the 0.7400 handle but gains in the recovery have been minimal.

The NFP report revealed an additional 209,000 jobs in the US in July which was ahead of the analyst consensus for a jobs gain of 183,000. There was an upward revision for the prior month to 231,000 from the originally reported 222,000. Average hourly earnings rose 0.3% for the month as expected and 2.5% for the year to beat an expected 2.4%. The unemployment rate ticked down to 4.3%.

NZD/USD had been recovering higher from a low posted yesterday and traded near resistance from a declining trend channel that has encompassed price action since the start of the month.

In the turn lower, the pair touched a low of 0.7392 prior to recovering above support at 0.7402 which marks the November 2016 low.

The antipodean currencies have shown the least losses against the greenback as of the European close while the Euro has posted the largest loss to lead the decliners list among the majors. The dollar was the strongest performer.

The US dollar index (DXY) broke higher after consolidating in a tight range in the prior three sessions. The index is on track to post a reversal candle on a weekly chart after posting losses in the last three consecutive weeks.

On a weekly chart, NZD/USD is on pace to post a bearish engulfing candle that ends a three-week winning streak.

Near-term support for the pair remains at 0.7402 and a break of the level exposes 0.7375 which marks the February high. Major upside resistance falls at the upper line of the declining trend channel, currently around 0.7440.

NZD/USD 1-Hour Chart


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