The NZD/USD pair (FOREX:NZDUSD) rallied during the session on Monday, but gave back about half of the gains. The candle looks a bit like a shooting star, and essentially says the same thing. After all, there is a significant amount of noise above, and the 0.82 level is the beginning of that noise. The fact that this candle formed right at that level doesn't surprise at all, and now it's possible the market will begin to try and selloff at this point.
Whether or not it can do it between now and Friday might be different story, as the nonfarm payroll number will be influential to the forex markets as per usual. With that being said, remember that the New Zealand dollar is highly sensitive to the commodity markets in general, and because of that trader should be a bit hesitant to get overly involved in this market between now and Friday. However, all things being equal this pair certainly looks like it favors the downside. At this point.
Weak commodities could be a weight on this pair.
The commodity markets softening out will continue to hamper this marketplace if they do in fact go that route. With that being the case, this market will start to selloff, and could get absolutely pummeled if the jobs numbers come in stronger than anticipated. Because of this, if the jobs number is strong, traders should be selling this pair immediately.
Watch overall commodity risk appetite to get a feel for where this pair could go. The New Zealand dollar tends to follow the overall attitude of commodity markets as it is more or less an agricultural currency, but used for satisfying risk appetite because of the higher yields in that economy. Going forward, there is no reason why this pair would be able to slice through the noise above, but would have to admit if it went above the 0.84 level that the Kiwi dollar is suddenly getting very strong, and probably heading to the 0.90 handle at that point.