- NZD/USD remains on the front foot on upbeat employment data from home.
- New Zealand Q2 jobs report amplified concerns over RBNZ rate hike in 2021.
- Market sentiment dwindles amid fresh geopolitical woes, mixed covid and stimulus headlines.
- Aussie-China data, risk catalysts can offer immediate direction ahead of the key US ADP and ISM PMI figures.
NZD/USD holds on to the weekly gains while taking the bids around 0.7035, 0.26% intraday, during early Wednesday morning in Asia. The kiwi pair recently gained on firmer second quarter (Q2) employment report from New Zealand (NZ).
NZ Employment Change rose past 0.7% market consensus and 0.6% previous readouts to 1.0% whereas the Unemployment Rate slumped below 4.5% forecast and 4.7% prior to 4.0%.
Read: NZ jobs data beats expectatons, NZD/USD marginally higher
Other than the positive data, the Reserve Bank of Australia’s (RBA) readiness to keep the September tapering on the table despite covid woes at home also backs the odds of the Reserve Bank of New Zealand’s (RBNZ) rate hike in 2021.
Recently easy covid numbers from Australia and the UK, versus a spike in the US infections, joins the RBNZ’s steps to curb the lending for homes while offering additional motivation to the NZD/USD bulls.
On the contrary, fresh geopolitical tussles between the West and Iran, as well as with China, test the pair buyers. Additionally, uncertainty over US President Joe Biden’s infrastructure spending bill passage in the Senate and cautious sentiment ahead of the key data/events of the week also probe the pair’s upside momentum.
It’s worth noting that a -0.10% print of the S&P 500 Futures, despite Wall Street’s upbeat performance, also challenges the NZD/USD bulls.
Having witnessed the initial reaction to the NZ data, the pair traders should keep their eyes on the Australian Retail Sales for June and China’s Caixin Services PMI for July for further direction. However, major attention will be given to the risk catalysts and the US data. Among them, ADP Employment Change for July, an early signal for Friday’s US Nonfarm Payrolls (NFP), as well as ISM Services PMI will be the key to follow.
Technical analysis
NZD/USD battles 200-day EMA around 0.7020 ahead of confronting a downward sloping trend line from June 15, near 0.7030. Even if the bulls manage to cross the 0.7030 hurdle, a confluence of 100-day and 200-day SMA, near 0.7100 will be the key to watch. On the contrary, failures to stay beyond 0.7000 may recall the bears targeting the 0.6920 horizontal support.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
EUR/USD retreats toward 1.0850 on modest USD recovery
EUR/USD stays under modest bearish pressure and trades in negative territory at around 1.0850 after closing modestly lower on Thursday. In the absence of macroeconomic data releases, investors will continue to pay close attention to comments from Federal Reserve officials.
GBP/USD holds above 1.2650 following earlier decline
GBP/USD edges higher after falling to a daily low below 1.2650 in the European session on Friday. The US Dollar holds its ground following the selloff seen after April inflation data and makes it difficult for the pair to extend its rebound. Fed policymakers are scheduled to speak later in the day.
Gold climbs to multi-week highs above $2,400
Gold gathered bullish momentum and touched its highest level in nearly a month above $2,400. Although the benchmark 10-year US yield holds steady at around 4.4%, the cautious market stance supports XAU/USD heading into the weekend.
Chainlink social dominance hits six-month peak as LINK extends gains
Chainlink (LINK) social dominance increased sharply on Friday, exceeding levels seen in the past six months, along with the token’s price rally that started on Wednesday.
Week ahead: Flash PMIs, UK and Japan CPIs in focus – RBNZ to hold rates
After cool US CPI, attention shifts to UK and Japanese inflation. Flash PMIs will be watched too amid signs of a rebound in Europe. Fed to stay in the spotlight as plethora of speakers, minutes on tap.