NZD/USD cheers upbeat domestic catalysts, weak USD as markets gear up for US NFP

  • NZD/USD stays beyond 200-day SMA for the first time since July.
  • Positive fundamentals at home, RBNZ’s bank capital decision lead to scaling back of expectations for heavy rate cuts in 2020.
  • US Dollar weakness, despite recent data recovery and trade headlines, also plays a role ahead of the key US jobs report.

NZD/USD takes the bids to 0.6550, nears the highest since August 06, at the start of Friday’s Asian session. In doing so, the quote stays above 200-day Simple Moving Average (SMA) for the first time since July this year.

The underlying catalysts have more to do with the improvement in New Zealand’s recent data points like from housing, commodity prices and business sentiment. Also contributing to the optimism are the talks that the New Zealand government is up for a ‘significant’ increase in infrastructure spending. This will increase the economy’s longer-term performance and cuts down the odds of rate cuts up for the later part of 2020.

Further, the Reserve Bank of New Zealand’s (RBNZ) bank capital decision also played a role after it allowed more time to banks as a transition period towards the new 16% capital requirement ration. In regards to this, the Australia and New Zealand Banking Group (ANZ) says, “While we believe the policy will tighten financial conditions more than the Reserve Bank anticipates, tweaks to the proposals (in particular allowing 2.5%pts of redeemable preference shares) soften the impact on bank funding costs, and the longer transition period will also take the edge off.”

With this, the ANZ removes the odds of August 2020 rate cut while holding expectations for a rate cut in May 2020.

On the other hand, the United States (US) continues to struggle as markets seem to ignore calls of trade talks from the Trump administration and President Donald Trump. Recent comments from Treasury Steve Mnuchin suggest US-China negotiators are actively working towards a deal while President Trump said trade meetings are going well. Even so, the Wall Street Journal (WSJ) recently reported that China and the US remain at odds over the value of farm goods Beijing will buy.

This dampened market’s risk recovery and stopped the US 10-year treasury yields around 1.80% with nearly two basis points of the rise. Additionally, improvement in the US Trade Balance and Factory Orders also couldn’t lure traders towards the greenback.

Given the absence of data/events up for publishing at home, markets will keep the cautious mode on before the November month US employment report. Increasing the tension is high expectations from the headlines Nonfarm Payrolls (NFP) at 180K despite the early signals indicating a disappointment to watch for.

Technical Analysis

August month high nearing 0.6590 and 0.6600 are likely immediate resistances on the Bull’s radar while sellers look for entry below a sustained break of 200-day SMA level of 0.6542.

additional important levels

Today last price 0.6548
Today Daily Change 17 pips
Today Daily Change % 0.26%
Today daily open 0.6531
Daily SMA20 0.6414
Daily SMA50 0.6369
Daily SMA100 0.6411
Daily SMA200 0.6544
Previous Daily High 0.6541
Previous Daily Low 0.6503
Previous Weekly High 0.6439
Previous Weekly Low 0.6394
Previous Monthly High 0.6466
Previous Monthly Low 0.6321
Daily Fibonacci 38.2% 0.6526
Daily Fibonacci 61.8% 0.6518
Daily Pivot Point S1 0.6509
Daily Pivot Point S2 0.6487
Daily Pivot Point S3 0.6471
Daily Pivot Point R1 0.6547
Daily Pivot Point R2 0.6563
Daily Pivot Point R3 0.6585



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.

Feed news

Latest Forex News

Editors’ Picks

EUR/USD hits two-month lows amid USD strength

EUR/USD has pared its gains that followed upbeat preliminary PMIs for Germany came out above expectations, pointing to a recovery. The USD is advancing amid fears of the coronavirus.


GBP/USD drops below 1.31 amid USD strength, fails to sustain PMI gains

GBP/USD is trading below  1.31 after hitting a fresh high of 1.3172. The UK Manufacturing PMI beat with 49.8 and Services PMI with 52.9. The USD is gaining ground across the board.


Cryptos: Bears take over and draw a bloody moon

Despite appearances, Bitcoin is the asset with the best risk/benefit ratio. The current falls are adjusted to the ranges of the previous rise. Downward momentum expires in the first half of February.

Read more

Gold rebounds above $1560

The XAU/USD pair dropped to a daily low of $1556.70 during the European trading hours as the easing worries over coronavirus becoming a global epidemic and a broad-based USD strength put the pair under bearish pressure.

Gold News

USD/JPY drops to two-week lows near 109.30

The USD/JPY pair reversed its direction during the American trading hours as the risk-off atmosphere allowed the JPY to find demand as a safe-haven.