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NZD/USD climbs to 0.6700 neighborhood, 5-week tops ahead of NFP

11/2/2018, 3:50:16 PMMarket Analysis
NZD/USD climbs to 0.6700 neighborhood, 5-week tops ahead of NFP

The NZD/USD pair built on previous session's strong upsurge and climbed to the 0.6700 neighborhood, or five-week tops in the last hour.

The pair on Thursday rallied hard and confirmed a near-term bullish breakthrough 50-day SMA barrier. A sharp US Dollar retracement from near 17-month tops was seen as one of the key factors behind the pair's impressive rally.

Adding to this, hopes over easing US-China trade tensions boosted investors' sentiment, which was evident from a fresh wave of risk-on trade and prompted some aggressive short-covering move around perceived riskier currencies - like the Kiwi.

The USD bulls held on the back-foot through the Asian session on Friday and the pair continued scaling higher for the second consecutive session as focus shifts to the upcoming key event risk - the keenly watched US monthly jobs report, popularly known as NFP. 

Against the backdrop of diverging Fed- RBNZ monetary policies, a stronger than anticipated employment details, especially average hourly wage growth data, would be enough to attract some fresh selling around the major.

Technical levels to watch

Momentum beyond the 0.6700 handle is likely to get extended towards late August swing high resistance near the 0.6725-30 region, above which the pair is likely to aim towards testing the 0.6765 supply zone.

On the flip side, the 0.6650-40 region now seems to act as an immediate support, which if broken is likely to accelerate the slide back towards the 0.6600 handle en-route 100-day SMA support near the 0.6575 zone.