New Zealand Dollar rises as softer US jobs data weighs on the US Dollar

The NZD/USD pair advanced toward the 0.5700 level on Thursday as the US Dollar (USD) weakened following softer-than-expected United States (US) employment data. The move reflected a broad reduction in USD demand, as investors reassessed the Federal Reserve’s policy outlook following signs that the US labor market is cooling.

The US Nonfarm Payrolls report showed that the economy added only 57,000 jobs in June, well below expectations of around 110,000. May’s figure was revised lower to 129,000 from the previously reported 172,000, reinforcing the view that hiring momentum is losing strength. The Unemployment Rate fell to 4.2%, although this was partly driven by a drop in labor force participation to 61.5%, the lowest level since 2021.

Wage growth remained steady, with Average Hourly Earnings rising 3.5% YoY, suggesting that inflation pressures have not fully disappeared even as job creation slows. Still, the weak headline payrolls figure reduced expectations of a near-term Fed rate hike.

China will remain a key external driver for the Kiwi, as New Zealand’s export outlook is closely tied to Chinese demand. Investors will watch the upcoming RatingDog China Services Purchasing Managers Index (PMI) after May’s reading jumped to 54.4 from 52.6, marking the fastest expansion in three months. A stronger services figure could support NZD sentiment, while a slowdown may limit further upside in NZD/USD.

Short-term technical analysis:

On the 4-hour chart, NZD/USD trades at 0.5694, maintaining a capped tone as it remains below the 100-period Simple Moving Average (SMA) at 0.5729, despite reclaiming the 20-period SMA at 0.5673. The pair is pressing the nearby ceiling formed by the 0.5699 and 0.5705 horizontal levels, while the Relative Strength Index (RSI) around 61 hints at improving bullish momentum that has yet to overcome the overhead structure.

On the topside, immediate resistance is clustered at 0.5699 and 0.5705, followed by 0.5718 and then the 100-period SMA at 0.5729, with more distant barriers at 0.5907, 0.5930 and 0.5965. On the downside, initial support is seen at 0.5690, with the 20-period SMA near 0.5673 providing the next cushion if sellers regain control.

(The technical analysis of this story was written with the help of an AI tool.)