NZDUSD Plunges As Bears Gain Strength

The New Zealand Dollar (NZD) extended downside movement against the US Dollar (USD) on Friday, dragging the price of NZDUSD pair to less than 0.6700 following the release of some important economic news. The technical bias however remains bullish because of a Higher Low in the recent downside move.

Technical Analysis

As of this writing, the pair is being traded near 0.6700. A support can be noted near 0.6560, the 23.6% fib level ahead of 0.6500, the psychological number and then 0.6427, the swing low of the last major downside move as demonstrated in the following daily chart.

On the upside, the pair is likely to face a hurdle near 0.6800-0.6833, the confluence of psychological number as well as high of the last major upside move ahead of 0.6896, the high October 15th. The technical bias will remain bullish as long as the 0.6427 support area is intact.

Initial Jobless Claims

The number of Americans filing for unemployment benefits last week fell from a five-month high, suggesting sustained labor market healing that could lead to further Federal Reserve interest rate hikes next year. Initial claims for state unemployment benefits dropped 11,000 to a seasonally adjusted 271,000 for the week ended Dec. 12, the Labor Department said on Thursday. The prior week’s claims were unrevised. It was the 41st straight week that claims remained below 300,000, a threshold associated with strong labor market conditions. That is the longest such run since the early 1970s.

Trade Idea

Considering the overall technical and fundamental outlook, selling the pair around current levels appears to be a good strategy in short to medium term.

usmanahmed7290@gmail.com'

Usman Ahmed

Usman Ahmed is an individual forex trader and market analyst. He holds a Masters of Business Administration (MBA) degree. His work includes fundamental and technical reports on various currency pairs, commodity futures and stock markets. His technical analysis features price action strategies.

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