New Zealand Employment Preview: A positive surprise?
|- New Zealand Q1 employment data seen little changed from previous quarterly figures.
- The market’s mood will set the tone for the kiwi rather than macroeconomic figures.
- NZD/USD holds above 0.6000, lacks follow-through for now.
New Zealand is being praised on how it has handled the coronavirus crisis. The country was unable to avoid introducing monetary stimulus, cutting rates to 0.25% back in March, while launching and assets purchase program of up to $30 billion worth of NZ Government bonds by April 2021.
New Zealand will report its Q1 employment data this Wednesday. Employment in the country is expected to have fallen by 0.3% in the three months to March, after holding unchanged in the previous quarter. The participation rate is projected at 69.9%, decreasing from the previous 70.1% while the unemployment rate is seen up to 4.3% vs. the previous 4.0%. Wages are expected to have increased by 0.4% QoQ and by 2.5% YoY.
Despite the pandemic is under control according to PM Jacinda Ardern, the economic downturn remains. The expected employment numbers are quite encouraging when compared to the situation in other major countries. A steep economic contraction in macroeconomic figures is mostly priced in, which means that chances of on the downside for the kiwi only in the case the outcome is much worse than anticipated.
NDZ/USD Technical outlook
The NZD/USD pair has bottomed at the critical 0.6000 figure earlier this week, lacking follow-through. Nevertheless, its bearish potential seems limited as the pair is building up strength ever since bottoming at 0.5468 back in March.
The daily chat shows that a mild-bullish 20 DMA has been providing support for over a week, although the pair is unable to sustain gains beyond it. Meanwhile, technical indicators hover within neutral levels, with the Momentum trying to advance although lacking strength enough.
The pair would have more chances of extending its advance if the market’s mood is upbeat throughout the release. The 0.6090 price zone comes as an immediate resistance ahead of 0.6130. Supports, on the other hand, come at the 0.6000 figure, while a steeper decline seems likely on a break below 0.5965.
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