Looking at the above hourly NZD/USD MT 4 price action chart, the New Zealand dollar has broken above a key falling trend line. This happened on Thursday. This trend line linked the 6, 8 and 13 January high price points going back to the weekly high price point lining up at 0.7240.
New Zealand dollar traders are watching headlines out of the United States. U.S. President-elect Joe Biden has just announced a new $1.9 trillion pandemic related fiscal stimulus plan.
He hopes to help an economy that has been battered by the coronavirus (Covid-19). This fiscal stimulus aid is badly needed to avoid long-term damage from the record setting and deep pandemic recession.
On Thursday, the U.S. Labor Department released weekly first time unemployment claims data that weakened the New Zealand dollar (NZD) in favor of the safe haven U.S. currency (USD). For the week ending 9 January, 965,000 Americans signed up for first time unemployment insurance. This was a sharp spike higher above the previous week’s 784,000 and well above median expectations of a rise of 795,000.
The labor market weakness, signaled in last week’s December non-farm payroll, has spilled into January. This should not come as a big shock considering the sharp spike in new coronavirus (Covid-19) cases across the United States which is forcing businesses to send workers home. Especially restaurant and hotel employees.
Daily New Zealand Dollar Technical Analysis (NZD/USD)
Looking at the above hourly price chart, the benchmark NZD/USD Forex market has formed a probable double top near 0.7240. A probable ascending triangle chart pattern also seems to be forming.
With that said, there is a rising trend line providing immediate support. This trend line, for now, is holding. As long as that rising trend line holds, the NZD/USD currency exchange rate could re-challenge that double top.
Especially as ascending triangle chart patterns tend to be bullish. In this case, the next upside barrier lines up at the early 2021 high price point at 0.73.