NZD/USD Forex Technical Analysis – Strengthens Over .7061, Weakens Under .7027

The New Zealand Dollar is inching lower early Thursday as traders await key U.S. employment data on weekly jobless claims later in the session and Friday’s major Non-Farm Payrolls report. On Wednesday, the Kiwi jumped to its highest level since August 4 following the release of a weaker-than-expected U.S. private sector jobs report.

At 05:04 GMT, the NZD/USD is trading .7066, down 0.0004 or -0.06%.

Helping to give the NZD/USD a boost the previous session was a report from ADP that showed 374,000 hirings last month against a forecast for 613,000. The news prompted traders to push out expectations for Fed asset purchase tapering.

On Thursday at 12:30 GMT, NZD/USD traders will get the opportunity to react to the latest weekly U.S. unemployment claims report. It is expected to show 342K new filings.

The Kiwi is also garnering support as traders firm bets on a rate hike by the Reserve Bank (RBNZ) next month.

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart, however, momentum has been trending higher since the formation of the closing price reversal bottom on August 20.

A trade through .7089 will change the main trend to up. A move through .6806 will signal a resumption of the downtrend. This highly unlikely, but since the NZD/USD is up nine sessions from its last main bottom on August 20, traders have to be aware of the possibility of a closing price reversal top.

The minor trend is up. This supports the upside momentum.

The main range is .7316 to .6806. The NZD/USD is currently testing its retracement zone at .7061 to .7121. This zone is controlling the near-term direction of the Forex pair.

The nearest support is a 50% level at .7027, followed by a short-term 50% level at .6942.

Daily Swing Chart Technical Forecast

The direction of the NZD/USD on Thursday is likely to be determined by trader reaction to .7061.

Bullish Scenario

A sustained move over .7061 will indicate the presence of buyers. If this move generates enough upside momentum then look for the rally to possibly extend into a pair of main tops at .7089 and .7105, followed by a Fibonacci level at .7121.

Bearish Scenario

A sustained move under .7061 will signal the presence of sellers. The first downside target is a 50% level at .7027. If this level fails as support then look for the selling to possibly extend into the next 50% level at .6942.