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The NZD/USD pair fell during the session on Thursday, but found quite a bit of support at the 0.82 level yet again. The resulting candle was a hammer for the session, and this hammer is competing with the shooting star from the last couple of sessions themselves. This suggests that we will continue to consolidate in this fairly tight range, and as such we think that the nonfarm payroll number coming out later today could be highly instrumental and finally pushing this pair further along the uptrend.
Of course, the Kiwi dollar is highly leveraged to the commodity markets, and by extension the easing that the Federal Reserve is currently doing. If the jobs number is extraordinarily weak, this would suggest that the Federal Reserve must continue to ease for much longer than people anticipated, and as such we could see the US dollar get really beat up against commodity currencies, and then of course this one.
We like a daily close above the 0.8350 level as a signal to buy for the longer-term again. Ultimately, this pair should go higher as the Federal Reserve looks set to ease for quite some time. We think the jobs number later today won't necessarily tell us anything we don't know already, but rather reinforce what people think. Because of this, we feel this market goes higher and do not have plans to sell this pair.
However, looking at the chart we can recognize the fact that the 0.79 level is the most recent significant low, and if that were broken we could start to get very bearish of this market. This looks very unlikely however, and as such we simply don't think about that at this point time.
Think any position ahead of the nonfarm payrolls is not a wise decision though, as we all know that the numbers can be a huge surprise. But certainly there was something that the Federal Reserve saw that made it think that unlimited easing was a good idea. This doesn't exactly instill confidence in the marketplace on the economy, and as such it's hard to believe that the jobs number will suddenly reverse their opinion. If we see this pair fall during the announcement later today, it will more than likely end up being a great buying opportunity.