NZD/USD Price Analysis: Symmetrical Triangle Signals Decreasing Volatility, US NFP Awaited

During the Asian session, the NZD/USD pair is moving sideways below the immediate resistance level of 0.6480. As investors await the release of the Caixin Services PMI and United States Nonfarm Payrolls (NFP) data for fresh impetus, the New Zealand dollar has moved sideways.

Weak earnings have disrupted the three-day winning spell of the S&P500 futures, which are showing large losses, portraying a risk aversion theme. The US Dollar Index (DXY) is attempting to reclaim Thursday's high above 101.55 after a corrective move, as investors' risk appetite has diminished substantially.

NZD/USD is exhibiting a chart pattern known as a Symmetrical Triangle, which signals a severe compression in volatility. The chart pattern's upward-sloping trendline is drawn from the January 19 low at 0.6365, while the downward-sloping trendline is drawn from the January 18 high at 0.6531. The New Zealand asset saw a precipitous decline on Thursday after failing to locate purchasing support following a breakout, resulting in a fakeout that locked investors at excessive levels.

The Relative Strength Index (14) has moved from the bullish area of 60.00-80.00 to the neutral level of 40.00-60.00, indicating an impending consolidation.

A collapse below the January 31 low of 0.6412 will push the Kiwi asset toward the January 17 low of 0.6366 and then the January 12 low at 0.6300.

On the other side, the asset needs to surpass Thursday’s high at 0.6538 for resuming the upside trend, which would propel the asset toward June 3 high at 0.6576. A violation of this level will expose the asset to the resistance level at 0.6600.