- NZD/USD witnessed heavy selling for the third straight day and dropped to five-week lows.
- Any attempted recovery towards the 0.7200 region might be seen as a selling opportunity.
NZD/USD maintained its heavily bearish tone through the mid-European session and was seen trading near five-week lows, around the 0.7130 region ahead of NFP
Given that this week's bounce faced rejection near the 0.7300 mark, the overnight break below the 0.7230-25 support was seen as a key trigger for bearish traders. A subsequent slide below the 0.7200 mark reaffirmed the bearish breakdown and exerted pressure on the major for the third consecutive session on Friday.
Meanwhile, stochastic oscillators on the daily chart flashing oversold conditions and seemed to be the only factor that helped limit losses .This support prospects for a pullback at 0.7100 psychological support level. If 0.7100 mark is broken decisively should open the way for additional weakness. The NZD/USD pair might then accelerate the fall towards the 0.7045-40 intermediate support before eventually dropping to challenge the key 0.7000 psychological mark.
On the flip side, any attempted recovery beyond the 0.7155-60 region might be seen as a selling opportunity. This, in turn, should cap the upside for the NZD/USD pair near the 0.7200 region which coincides with 50% retracement. This is closely followed by the 0.7225 support breakpoint, which should now act as a short-term top for the major.
