The New Zealand Dollar (NZD) extended upside movement against the US Dollar (USD) on Thursday, increasing the price of NZDUSD to more than 0.7000 following the release of some key economic news. Technical bias however remains bearish because of a lower low and lower high in the recent wave.

Technical Analysis  

The New Zealand dollar recently traded higher towards the 0.7030 level against the US Dollar. The NZDUSD pair found sellers above 0.7000, and started moving down towards the 0.6970 support.

The New Zealand dollar started an uptrend from the 0.6890 low and traded above the 0.7000 level where it found sellers. The NZDUSD pair is currently moving lower, and about to test a major support area near 0.6970. It was a resistance earlier, and may now act as a support.

Initial Jobless Claims

The number of Americans filing for unemployment benefits fell to near a 43 year-low last week, pointing to further tightening in the labor market.

Initial claims for state unemployment benefits dropped 28,000 to a seasonally adjusted 235,000 for the week ended Dec. 31, the Labor Department said on Thursday. That was close to the 233,000 touched in mid-November, which was the lowest level since November 1973.

Caixin China Services PMI

Today in China, the Caixin China Services PMI™, which is based on data compiled from monthly replies to questionnaires sent to purchasing executives in over 400 private service sector companies was released. The market was expecting a minor rise from the last reading of 53.1 in Dec 2016.

The result was around the forecast, as there was a rise from the last reading of 53.1 to 53.4 in Dec 2016. The report added that the “Improved rates of new order growth were also seen across both monitored sectors in December. The pace of new business expansion accelerated to its strongest since July 2014 at manufacturing companies amid reports of improving client demand”.

Trade Idea

Considering the overall technical and fundamental outlook, buying the pair on dips appears to be a good strategy.