NZDUSD – Can New Zealand Dollar Retain Bullish Bias Vs USD?
Aayush Jindal
Key Highlights
The New Zealand dollar gained a lot this week and moved above 0.7250 against the US Dollar.
There is a monster bullish trend line with support at 0.7270 on the 4-hours chart of NZDUSD.
Today, the New Zealand Employment Change figure for Q4 2016 was released by the Statistics New Zealand.
There was a change of 0.8% in Q4 2016, compared with the 0.8% forecast, and 1.4% previous.
NZDUSD Technical Analysis
The New Zealand dollar was seen gaining pace vs the US Dollar, as it moved above 0.7250. There is a good trend formation in NZDUSD, which might take the pair further higher.On the downside, the pair remains supported near 0.7270-0.7250. It’s because a bullish trend line is positioned at 0.7270 on the 4-hours chart. The stated support also coincides with the 61.8% Fib retracement level of the last leg from the 0.7222 low to 0.7350.The pair is currently trading sharply lower, but the 0.7270 may provide support. As long as the trend line support is intact, the pair may bounce back. A break below 0.7250 might call for a trend change in the short term.
New Zealand Employment Change
Today, New Zealand saw release of the Employment report for Q4 2016 by the Statistics New Zealand. The market was aligned for a change of +0.8% in Q4 2016, compared with the previous quarter. The result was similar. The change in the number of employed people came in at 0.8% in Q4 2016.The Unemployment Rate posted a sharp rise from 4.9% to 5.2% in Q4 2016. The market was aligned for a decline to 4.8%. It caught the attention of NZD sellers, pushing the price below 0.7300.The labor cost index (LCI) was aligned for a +0.5% rise in Q4 2016, compared with the previous quarter. It posted an increase of 0.4%. The report added that “Over the quarter, 25,900 more people were underutilised (not seasonally adjusted). The increase came from more people being unemployed, and more people actively seeking work but not currently being available to work.”Overall, the result was not as the market expected, which resulted in a bearish pressure on NZDUSD. The pair now faces a huge challenge near 0.7270 as a support.
On the downside, the pair remains supported near 0.7270-0.7250. It’s because a bullish trend line is positioned at 0.7270 on the 4-hours chart. The stated support also coincides with the 61.8% Fib retracement level of the last leg from the 0.7222 low to 0.7350.The pair is currently trading sharply lower, but the 0.7270 may provide support. As long as the trend line support is intact, the pair may bounce back. A break below 0.7250 might call for a trend change in the short term.
The Unemployment Rate posted a sharp rise from 4.9% to 5.2% in Q4 2016. The market was aligned for a decline to 4.8%. It caught the attention of NZD sellers, pushing the price below 0.7300.The labor cost index (LCI) was aligned for a +0.5% rise in Q4 2016, compared with the previous quarter. It posted an increase of 0.4%. The report added that “Over the quarter, 25,900 more people were underutilised (not seasonally adjusted). The increase came from more people being unemployed, and more people actively seeking work but not currently being available to work.”Overall, the result was not as the market expected, which resulted in a bearish pressure on NZDUSD. The pair now faces a huge challenge near 0.7270 as a support.