# NZDUSD Head and Shoulders (Oct 06, 2017)

Source: https://www.tradersway.com/resources/market-info/nzdusd-head-and-shoulders-oct-06-2017/
Language: en
Updated: 2017-10-06

NZDUSD could be in for more losses as price formed a head and shoulders pattern on its daily time frame.



Price is also testing the neckline around the .7100 major psychological mark and a breakdown could send it lower by 450 pips or the same height as the chart formation.



However, the 100 SMA is above the longer-term 200 SMA so the path of least resistance is to the upside. This means that there’s still a chance for the long-term uptrend to resume. Stochastic is also dipping into the oversold region, which reflects exhaustion among sellers and a potential return in buying pressure.



Earlier this week, New Zealand’s GDT auction yielded a 2.4% slump in dairy prices, erasing the gains chalked up in earlier weeks. The NZIER business confidence index has also taken a hit and fallen from 18 to 5 to reflect much lower optimism among firms.



On the other hand, the dollar has gained strong support from better than expected leading indicators for the NFP. The ISM manufacturing and non-manufacturing PMIs both beat expectations and showed gains in the employment component while the ADP report and Challenger job cuts also reflected positive hiring momentum.



![NZDUSD Head and Shoulders (Oct 06, 2017)]



The main catalyst for today is the NFP release, which is expected to show a gain of 88K versus the earlier 156K figure. A higher than expected read could boost December hike expectations, especially since the latest batch of Fed officials to give speeches sounded more upbeat. On the other hand, a huge miss could lead to losses for the dollar if traders think it’s bad enough to keep the US central bank on hold for the rest of the year.



*By Kate Curtis from Trader’s Way*