The New Zealand dollar enjoyed the robust jobs report and the weakness of the greenback to gain ground. A sole event awaits us this week. Here is an analysis of fundamentals and an updated technical analysis for NZD/USD.

New Zealand enjoyed a rise of 2.4% in jobs and a drop to 5.1% in the unemployment rate. Also milk prices gave their support with a leap of 12.7%. In the US, the Fed’s minutes showed little appetite for a rate hike.

Updates:

NZD/USD daily graph with support and resistance lines on it. Click to enlarge:

1. Trade Balance: Tuesday, 22:45. New Zealand enjoyed surpluses in its trade balance in recent months, with 127 million seen in June. We now get the data for July and this time, a deficit of 320 million is predicted.

NZD/USD Technical Analysis

Kiwi/dollar began the week with advances, but was still capped by the 0.7330 level.

Technical lines, from top to bottom:

The round number of 0.74 served as resistance and support back in 2015. 0.7330 is the high of 2016 so far.

0.7290 was the pre-Brexit peak and serves as high resistance. The next line is 0.7240 which capped the pair in July 2016.

0.7160 worked as support when the kiwi was trading on the much higher ground in 2014. 0.7050 was the peak in April 2015.

The round level of 0.70 is still important because of its roundness but it isn’t really strong. The low of 0.6940allowed for a temporary bounce.

The round 0.69 level has switched positions to resistance. 0.6840 capped the pair during May 2016 and tops the range. 0.6720 is the low seen in May 2016 more than once providing the lower bound.

The round level of 0.67 that works nicely as support. Another line worth noting is 0.6640, which capped the pair in November.

I am neutral on NZD/USD

While the RBNZ wants to push the currency down, the economy looks solid and these forces offset each other.

Our latest podcast is all about the Fed’s forecast failures.

Audio length: 00:28:13