NZD/USD Forex Technical Analysis – Trend Up, but Downside Momentum Could Drive Prices into .6639 – .6604

The New Zealand Dollar is under pressure early Friday, following a steep sell-off the previous session, as the U.S. Dollar steadied ahead of the key U.S. jobs data report that may cast doubt on the strength of the economic recovery from the coronavirus outbreak.

The Kiwi is also being pressured by a sell-off in the global stock markets that hurt currencies seen as a proxy for riskier trades. Wall Street’s main indexes closed sharply lower on Thursday, marking their deepest one-day dives in months as investors dumped the high-flying technology sector, while economic data highlighted concerns about a long and difficult recovery.

At 06:06 GMT, the NZD/USD is trading .6704, down 0.0009 or -0.13%.

Finally, data due later on Friday is expected to show U.S. non-farm payrolls grew by 1.4 million in August, which would be slower than the 1.763 million jobs created in the previous month.

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. A trade through .6789 will signal a resumption of the uptrend. The main trend will change to down on a move through .6489.

The short-term range is .6489 to .6789. Its retracement zone at .6639 to .6604 is the primary downside target.

Daily Swing Chart Technical Forecast

There is no trigger point today. The direction of the NZD/USD the rest of the session on Friday is likely to be determined by the U.S. non-farm payrolls report or stock market volatility.

A weaker than expected jobs report could be supportive for the Kiwi since the news is likely to lead to a drop in demand for the U.S. Dollar.

However, any rally could be offset by another volatile session in the stock market. Another steep sell-off will dampen demand for higher-risk currencies like the New Zealand Dollar. This will put downside pressure on the NZD/USD.