Today’s Non-Farm Payroll release results were mixed, but the US Dollar Index (DXY) was set on moving higher. As the majors adapt to the DXY, NZDCAD has found itself in a unique situation.
The unemployment rate for the US economy came in at 6.7% versus the forecast of 6.8%. But, the job market faced a loss of -140,000 jobs versus the forecast of adding 60,000 jobs. Despite the mixed result, the Dollar went on to create new highs for the week. Price action and smart money traders still belief the bearish trend will continue after this retracement is over. Price is expected to reject 90.15 and push lower again.
A look at the monthly time frame for NZDCAD shows a pair that is at a key resistance zone. Traders can elect to do two things, wait for the break above to go long, or a rejection to go short. Based on the current uptrend on the higher time frames, price action traders are focusing on price breaching resistance on the daily time frame before entering long. Technical analysis also supports a bullish NZD so that should provide further confluence to this trade idea.
The first week of 2021 has carried over the chaos that occurred in 2020. This week contained an attack on the Capitol, Donald Trump’s concession, and the NFP release. Traders should note that this is the first week of the first month of the new year. There will be more than enough time to get trades to continue the success achieved in 2020. The markets reward patience, so that is what traders should display.