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NZD/USD: bearish picture

New Zealand dollar recovered its positions after the scandal caused by contaminated dairy product woes. On Monday NZD/USD opened the week with a bearish gap and tested a low at $0.7735, but has finally closed the gap, forming a strong green candle. On Tuesday the pair extended the upside to $0.7890, but was capped by the bottom of the strong bearish Ichimoku.

Resistance for the pair is now seen at $0.7875, $0.7900 (50-day MA) and $0.7915, while support – at $0.7860/50, $0.7830 and $0.7800. The near-term prospects of the pair look bearish, but a rise above $0.7900 could improve the picture.

The market attention is now focused on the New Zealand labor market data at 22:45 GMT. According to the consensus forecast, unemployment rate may increase to 6.3%, while employment – to rise by 0.3% q/q (prior: +1.7%). These data releases are a new downside risk for the pair: negative data will put the prospects of the NZ rate hikes into question. 

Chart. Daily NZD/USD

Chart. H4 NZD/USD

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