NZD/USD has been quite impulsive, following the bearish trajectory since it broke below 0.7150 support area with a daily close. After the impulsive break below the area, the pair lacks bullish pressure to make the price retrace higher towards 0.7150 area.
NZD has been quite positive amid the recent economic reports, including Employment Change report. Employment increased to 0.6% from the previous rate of 0.4% and Unemployment Rate edged down to 4.4% as expected from 4.5% previously. The positive reports helped NZD to stop the impulsive bearish pressure from USD.
Ahead of the US nonfarm payrolls, USD is currently quite impulsive with the gains. Today, US Average Hourly Earnings report is going to be published which is expected to decrease to 0.2% from the previous value of 0.3%, Non-Farm Employment Change report is expected to increase to 190k from the previous figure of 103k, and Unemployment Rate report is expected to decrease to 4.0% from the previous value of 4.1%.
As for the current scenario, the reports on the US labor market of major importance are expected to be quite mixed in nature. However, better-than-expected readings will lead to massive impulsive gains over NZD in the coming days which might lead to an unstoppable bearish pressure in the future.
Now let us look at the technical view. The price is currently residing way below the dynamic levels of 20 EMA, Tenkan and Kijun line, from where it is expected to push higher towards the 0.7150 before pushing lower in the coming days. Certain Bullish Divergence has been forming in the process which is expected to fuel the upcoming bullish intervention along the way. The bullish momentum is expected to be a form of retracement for the continuation of the bearish trend further. As the price remains below 0.7250 with a daily close, further bearish pressure is expected to continue.
