NZD/USD tests 0.74 handle as USD preserves bullish momentum

The NZD/USD pair erased all of its daily gains in the first half of the NA session as the upbeat employment report from the U.S. triggered a long-awaited USD recovery. As of writing, the pair is trading at 0.7409, losing 0.35% on the day.

The selling pressure witnessed on the pair is clearly a product of the greenback strength. At the moment, the US Dollar Index is at 93.50, up 0.85% on the day. Today's data from the U.S. showed that the nonfarm employment increased by 209,000, beating the market expectation of 183,000. Additionally, average hourly earnings advanced by 0.3% in July after rising by 0.2% in June and met the market consensus. Moreover, the trade deficit decreased to $43.6 billion from $46.4 billion and provided an extra boost to the US dollar.

• US: Total nonfarm payroll employment increased by 209,000 in July
• US: Goods and services deficit was $43.6 billion in June, down $2.7 billion from May

On the other hand, the barrel of West Texas Intermediate is trading below the $49 mark, losing 0.6%, and further hurting the commodity-sensitive kiwi. With no macro data left in the remainder of the session, the pair could have a difficult time shaking off the selling pressure.

Technical outlook

The pair could face the initial support at 0.7325 (50-DMA) ahead of 0.7260 (Jul. 17 low) and 0.7200 (psychological level/Jul. 11 low). On the upside, the first technical resistance could be seen at 0.7465 (10-DMA), 0.7550 (psychological level) and 0.7560 (Jul. 27 high).