The NZDUSD is one the weakest (and biggest movers) of the major currency pairs today (The USDJPY is the biggest mover with a move of 1.92%). The NZDUSD pair is currently down -1.85% on the day (higher USD). The run higher in US yields is the chief catalyst. It isn't necessarily a stock play as the major indices are either higher, or marginally lower (S&P and Nasdaq are both down -0.11%). So there is no risk off flows pushing the NZD lower. I
Commodities are lower however, which does tend to hurt currencies like NZD and AUD.
The NZDUSD pair has a range of 140 pips so far today which is well above the 81 pip average seen over the last month of trading. Most of that is to the downside. The pair closed at 0.6473. The high price reached 0.6480. IT could be oversold. When
Looking at the hourly chart, the pair, fell off the cycle high on Thursday and closed the day near the 200 and 100 hour MAs (green and blue lines). Into the US employment report, the pair traded below the 200 hour MA, but held off on going TOO far to the downside. The report was either going to push the price back above the moving averages or away from the moving averages (to the downside).
The nonfarm payroll gain of 517K with the unemployment rate falling to 3.4% gave the go-ahead to tumble to the downside.
The low price fell below the most recent lows from earlier this week down to 0.6411 (lows on Tuesday and Wednesday bottomed between 0.6411 and 0.64156). The corrective move higher reached up to 0.64087 just ahead of those swing lows, and resumed the move to the downside. Sellers stayed in control. You
The ISM nonmanufacturing Index gave the next push below the 50% midpoint of the 2023 trading range. That level comes in at 0.6363
The low price reached 0.63407 before bouncing modestly. However the price in the current hour remains below the 50% midpoint at 0.63638. That level is a close risk for traders looking for even more downside. The best case scenario would be to stay below that level. Move above and there could be some disappointment/short covering into the weekend.
What would really hurt shorts looking for more downside now?
On the top side a move back above the 50% retracement has a lot of room between it and the 38.2% retracement at 0.64047 (another upside target). The swing lows from earlier this week at 0.6411 and 0.6415 would also be limits for shorts looking for something bigger longer term in this pair. Nevertheless, traders don't want to see the price start to move back above those levels. That would be a problem.
So sellers are still in control. The pair is one of the biggest movers today, but as with most trades, it's "what can you do for me from here". The range is big so there may be a stall. Technically, sStay below 50% is the best case scenario for shorts. Move above and there may be more two way flows and a more balanced market with the 0.6405-15 area as resistance.