100 day MA will be key in next weeks trading

The NZDUSD surged higher in trading on Friday after the US employment report disappointed (NFP 126K vs 245K, 2-month revision -69K). On the move higher, the pair was able to get and stay above the close from a week ago at 0.7567.

Fundamentally, the RBNZ was thought to intervening in the market this week and that contributed to the decline in the first half of the week. Now with the US employment slowing, it could make it more difficult to continue that strategy.

Technically, the pair moved above the 200 hour MA, 50% and 61.8% retracement levels during Friday's trading. The final push, extended above the 100 day moving average at the 0.7614 level, but the momentum could not be maintained. The subsequent decline into the close to the price back toward broken trendline support at the 0.7585 level. A move below, could have the price. Looking back toward the 50% retracement and 200 hour moving average near the 0.7543 level. If this happens in early trading next week, look for buyers on a dip against this level. This level should hold support (risk for longs).

On a move higher, the next targets become the 0.7663 level and the 0.7691 – 0.7700 area.

Looking at the daily chart, the importance of getting above the 100 day moving average is evident. In March, the price traded above this level on four separate days - 2 of those days saw the price close above the moving average. The final 2 days saw on movement back below. That helped contribute to the fall in the early part of last week's trading.

Going forward, if the buyers are to take more firm control, a move back above and staying above the 100 day moving average will be needed. From there the a move toward the 0.7700 will be eyed (watch 0.7682 trend line too). Above that, and the next target does not come in until the 0.78094.

Intervention is easier if the USD is bid. If the USD has a correction period, the RBNZ might have to go to the sidelines and wait it out. Another thing to consider is the AUDNZD is getting close to the all important 1.0000 level. The could be supportive to the currency if the level is broken and stops are triggered. It could also weigh on the NZDUSD if the AUDNZD corrects higher. It does not have to be that way. The AUDUSD can simply rise at a faster pace, but be aware.

The good news, is the technical levels can be mapped out.