NZD/USD Price Analysis: Bears move in on key support territory
|- NZD/USD drops hard following the US NFP report.
- The price is left testing a familiar cluster of daily support.
NZD/USD has dropped on the back of a rally in the US dollar on Friday due to an astonishing outcome in the US labour market data. Nonfarm Payrolls in the US rose by 528,000 in July, the data published by the US Bureau of Labor Statistics revealed on Friday. This reading followed June's increase of 398,000 (revised from 372,000) and came in better than the market expectation of 250,000. The Unemployment Rate edged lower to 3.5%.
Meanwhile, from a technical perspective, they are no clearer to the eye while the price remains bound by a cluster of daily support and resistance. The pair has been trading in a wide range since breaking out of the daily trendline resistance, failing to maintain a directional bias over the past two weeks of choppiness. The following illustrates the current structure and potential scenarios for the coming days.
NZD/USD daily chart
The price is testing a cluster of support on the daily chart with 0.6190 a potential key structure that if broken will open the risk of a significant sell-off towards a test of 0.61 the figure. Below there, 0.5900 will be eyed. However, should the bulls somehow manage to fend off the bears, then there will be prospects of a move into the recent highs that guard a breakout to the upside.
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