NZD/USD: downside correction support at 100 dma

NZD/USD is unchanged since dropping down to the 200 sma on the 4hr chart in the aftermath of the nonfarm payrolls. The market was satisfied with the participation and unemployment rates, despite the headline disappointment.

Meanwhile, while we are in a sea of calm in the FX space, Yellen will be testifying at Capital Hill this week as the highlight for the pair. Markets will be expecting much of the same optimism from Yellen, but should there be an air of caution due to this years starting turmoil or any doubts over whether the Fed can continue raising rates this year, the greenback could be exposed to the downside as a result on dovish remarks. For the New Zealand economy, we are very light on the data from apart from electronic card sales.

NZD/USD levels

Technically, NZD/USD remains better offered below 0.6866 as the start of the 2016 downtrend. The 4hr 200 sma at 0.6602 comes in as first support ahead of a deeper retracement to 0.6560 200 sma supporting territory on the same time frame. On the flip side, a correction targeting the 2016 downtrend has first resistance at R1 0.6693 ahead of R2 at 0.6710 and R3 at 0.6727.