NZD/USD Bounces From 200 DMA

NZD/USD caught a bid at a confluence of support found near the 200-period daily moving average on Thursday. The pair trades off session lows but remains in negative territory despite a broader turn lower in the Dollar as the Kiwi Dollar is being outperformed by its counterparts, and the only currency unable to gain against the Dollar among the majors.

Weekly US jobless claims rose to 268,000 against analyst expectations for 252,000 claims and a prior reading of 251,000. Manufacturing PMI in the United States was revised up to 54.1 in November from the initial reading of 53.9 and a reading of 53.4 in October. The ISM manufacturing PMI was reported to rise to 53.2 in November, reflecting 5-month highs for the figure.

On Friday, the latest jobs numbers will be released out of the United States and expected to drive volatility to the Dollar pairs. Non-farm employment gains are expected at 165,000, analysts expect the unemployment rate to remain unchanged at 4.9% and average hourly earnings are expected at 0.2%.

The US Dollar index (DXY) turned lower today to erase a bulk of yesterday’s gains. DXY posted a high shortly ahead of the European close yesterday and was last seen trading at 101.02 against an opening price of 100.86 on Wednesday. The index trades lower despite yesterday’s daily candle engulfing losses from the prior two sessions.

NZD/USD is bouncing from the 200 DMA and a horizontal level at 0.7038 representing October lows. The pair has erased a bulk of early day losses and was last seen trading at 0.7071 for a loss of 0.15%. The pair had posted a bearish engulfing daily candle on Wednesday and was seen dropping below a rising trendline on a 4-hour chart that dates back to recent lows posted on November 24. The pair is nearing resistance at 0.7085, the level was important in triggering a decline last week. Support at 0.7057 has held the pair higher and remains the first level of interest to the downside. Larger support for the pair remains at 0.6991 as the level carries close proximity to the psychological 0.7000 handle and has held the pair higher since mid-June.

NZD/USD 4-Hour Chart


Jignesh is an analyst and trader, specializing in currencies and commodities. He utilizes a macro view as well as a proprietary method of pattern recognition that is based on the principles of Elliott wave. His focus is to assess strength in trends, and perceiving high potential turning points in the markets. He brings over 4 years of experience in his current role.