US Dollar Explodes Following Splendid NFP Data

Not only did we get high NFP numbers for January, but we also got positive revisions for the past months. It is not a job market, it is rather paradise back on the financial market’s earth, the USD is trading higher everywhere.

The strength of the US dollar manifested itself in relation to the kiwi, in particular. At the end of January, the pair’s price broke absolutely crucial support for the long-term situation on the NZDUSD – 0.67 (orange). First of all, that’s 38,2% Fibonacci.

Additionally, it was an important resistance in 2019 and 2020. In addition to that, markets had a lower line of the flag (green) in the same place. Sellers crashed those supports creating a legitimate, proper, sell signal.

As it often happens, broken support is later tested as a resistance. That was also the case with the Kiwi. Thanks to the NFP, the price bounces off this resistance, which confirms a downward direction. Sentiment on NZDUSD is negative, as long as we stay below the orange area.

Should the price come back above, it would be an amazing buy signal. But so far, this scenario is not very probable.