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James Hyerczyk
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New Zealand Dollars

The New Zealand Dollar took a hit on Friday after the U.S. Dollar rallied sharply in reaction to a report from the U.S. Labor Department which revealed non-farm payrolls rose by 224,000 jobs in June, the most in 5 months, and well-above the 162,000 jobs forecast. The news gave Kiwi investors an excuse to book profits after a recent 11 session rally.

On Friday, the NZD/USD settled at .6629, down 0.0059 or -0.88%.

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The report helped drive U.S. Treasury yields higher which made the U.S. Dollar a more attractive investment. Investors continued to support a Fed rate cut for late July, but also are looking for the Reserve Bank of New Zealand to resume its easing in August.

Daily NZD/USD

Daily Technical Analysis

The main trend is down according to the daily swing chart. The main trend changed to down on Friday when sellers took out the July 2 main bottom at .6656. Buyers will have to take out .6720 and .6727 to resume the uptrend.

The main range is .6939 to .6481. Its retracement zone at .6710 to .6746 stopped the Forex pair at .6727 and .6720.

The intermediate range is .6784 to .6481. On Friday, the NZD/USD closed on the weak side of its retracement zone at .6633 to .6669.

Both retracement zones should be considered resistance.

The short-term range is .6487 to .6727. Its retracement zone at .6607 to .6579 is potential support. The upper or 50% level of the range stopped the selling on Friday.

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Daily 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 a pair of Gann angles at .6627 and .6647.

Bearish Scenario

A sustained move under .6627 will indicate the presence of sellers. If this creates enough downside momentum then look for the selling to possibly extend into the 50% level at .6607. Taking out this level could trigger an acceleration into the Fibonacci level at .6579, followed by an uptrending Gann angle at .6567.

Bullish Scenario

Overtaking .6627 and .6647 will signal the return of buyers. This could trigger an acceleration to the upside with the next potential target angle coming in at .6677.

Overview

Due to the thin holiday trade on Friday, the selling may have been a little excessive so don’t be surprised by a short-covering rally. If the NZD/USD is headed lower then sellers should come in on any counter-trend rally.

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