NZD/USD building on to its gains above 0.7200 mark

The NZD/USD pair maintained is bid tone and has now reclaimed 0.7200 handle to move back into positive territory for the week as markets now look forward to the release of monthly jobs report from the US.

A broad weakness in the US Dollar is seen extending support to the pair's recovery from weekly lows for second day running. The recovery is also gaining traction from recovery in commodities, benefitting commodity-linked currencies - like the Kiwi. 

However, key driver for the pair's near-term trajectory would be the release of monthly jobs report from the US later during NA trading session. Consensus estimates expect the report to show US economy added 180k jobs during the month of July while the unemployment rate is expected to drop to 4.8% from June's 4.9%.

From technical perspective, the pair seems to be in the process of forming a bearish Head & Shoulders chart patterns, which would be confirmed once the pair decisively breaks below 0.7000 psychological mark. However, a decisive move above 0.7250 strong resistance would negate the formation and pave way for further near-term up-move for the pair.

Technical levels to watch

From current levels, momentum above 0.7230 immediate resistance is likely to get extended towards 0.7250 important resistance, which if conquered decisively would negate possibilities of any near-term bearish bias and continue boosting the pair further towards July daily closing highs resistance near 0.7300 handle.

On the flip side, weakness below session lows support near 0.7175-70 region, and a subsequent drop below 0.7150 horizontal support, now seems to turn the pair vulnerable to break through 0.7100 handle, towards testing 0.7080-75 support area.