NZD/USD Forex Technical Analysis – Plenty of Room to the Downside Under .6725

The New Zealand Dollar fell against the U.S. Dollar on Friday after a jobs report for March showed the U.S. economy added more jobs than expected during the month while wage pressures were muted.

According to the government report, U.S. Non-Farm Payrolls rose by 196,000 jobs last month. Traders were looking for an increase of 172,000 jobs. Additionally, data for February was revised modestly higher by 33,000 jobs, better than the previously reported 20,000.

Wage gains also slowed in March and more people dropped out of the labor force. The Unemployment Rate came in unchanged as expected at 3.8%. Average hourly earnings increased by four cents, or 0.1 percent in March after jumping 0.4 percent in February.

On Friday, the NZD/USD settled at .6735, down 0.0018 or -0.27%.

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart. The trend turned down April 2 when sellers took out the March 7 main bottom at .6744. The main top is .6939, a trade through this level will change the main trend to up.

The NZD/USD is down 11 sessions from the last main top so it will begin Monday’s session inside the window of time for a closing price reversal top. This chart pattern won’t change the trend, but it could trigger a 2 to 3 day counter-trend rally.

The main range is .6970 to .6591. Its retracement zone at .6781 to .6825 is new resistance. Trading on the weak side of this zone is also contributing to the downside bias.

The short-term range is .6591 to .6843. Its retracement zone at .6767 to .6725 is currently being tested. It is also controlling the near-term direction of the Forex pair. If it fails, the chart shows there is plenty of room to the downside before the next support target.

Daily Swing Chart Technical Forecast

Based on Friday’s price action, the direction of the NZD/USD on Monday is likely to be determined by trader reaction to the short-term Fibonacci level at .6725.

Bullish Scenario

A sustained move over .6726 will indicate the presence of buyers. If this creates enough upside momentum then we could see a retracement into a pair of 50% levels at .6767 and .6781.

Bearish Scenario

A sustained move under .6725 will signal the presence of sellers. The selling pressure will increase if the main bottoms at .6719 and .6706 fail as support. This could trigger an acceleration to the downside with the January 3 bottom at .6591 the next major target.