NZD/USD faces strong downward force amid surprising strong NFP figures


  • The NZD/USD showed a strong downward swing, falling near the 0.6060 level.
  • US Nonfarm Payrolls added 353K jobs in January surpassing by a wide margin the expectations.
  • The bets of a rate cut in March sharply declined and markets pushed the start of the easing to May.

In Friday's trading session, the NZD/USD took a steep turn downwards, landing at a rough level of 0.6060. The pronounced downward trajectory resulted from a surprisingly strong US Nonfarm Payrolls report that pushed the pair into bearish domain as markets gave up the hopes of sooner rate cuts by the Federal Reserve (Fed). For the week, the pair closed a 0.40% weekly loss.

The US Bureau of Labor Statistics reported that the Nonfarm Payrolls for January presented a robust picture with a significant increase of 353K compared to the consensus figure of 180K and the previous 333K. The Average Hourly Earnings in January increased by 0.6%, outstripping the anticipated 0.3% and the preceding 0.4% respectively while the yearly measure soared to a 4.5%, higher than the prior 4.4% and beating the expected 4.1%. Lastly, the Unemployment Rate for January remained steady at 3.7%, which aligns with its previous figure and was slightly lower than the anticipated 3.8%.

As a reaction, the US bond rose across the board as markets start to prepare for the easing cycle of the Fed to start in May rather than in March. The 2-year rate is currently standing at 4.37%, with the 5 and 10-year yields observed at 4% and 4.05% respectively. As per historical financial trends, a rise in yields generally tends to fortify the USD's position as it is more appealling for foreign investors.

In line with that, the CME FedWatch Tool showed a significant drop in the likelihood of a March interest rate cut, with estimates now standing at just 20% while the odds of a cut in the following May meeting rose to nearly 58%.

NZD/USD levels to watch

The daily chart suggests that the pair has a bearish bias, at least in the short-term. Indicators signal declining buying power, as depicted by the negative slope and negative territory in the Relative Strength Index (RSI). Adding to that the histogram of the Moving Average Convergence Divergence (MACD) displays rising red bars, hinting that the overall momentum favors the sellers.

Looking at the pair's position relative to moving averages, it is trading below the 20-day and 200-day Simple Moving Averages (SMAs), another sign of bearish sentiment. Yet, interestingly, it sits above the 100-day SMA, indicating that the bulls are maintaining a bullish grip on the broader outlook.


 

NZD/USD

Overview
Today last price 0.6073
Today Daily Change -0.0067
Today Daily Change % -1.09
Today daily open 0.614
 
Trends
Daily SMA20 0.6155
Daily SMA50 0.619
Daily SMA100 0.606
Daily SMA200 0.6087
 
Levels
Previous Daily High 0.6143
Previous Daily Low 0.6109
Previous Weekly High 0.615
Previous Weekly Low 0.6061
Previous Monthly High 0.6339
Previous Monthly Low 0.6061
Daily Fibonacci 38.2% 0.613
Daily Fibonacci 61.8% 0.6122
Daily Pivot Point S1 0.6118
Daily Pivot Point S2 0.6096
Daily Pivot Point S3 0.6084
Daily Pivot Point R1 0.6152
Daily Pivot Point R2 0.6164
Daily Pivot Point R3 0.6186

 

 

Share: Feed news

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


Recommended content

Editors’ Picks

EUR/USD flirts with 1.0700 post-US PMIs

EUR/USD flirts with 1.0700 post-US PMIs

EUR/USD maintains its daily gains and climbs to fresh highs near the 1.0700 mark against the backdrop of the resumption of the selling pressure in the Greenback, in the wake of weaker-than-expected flash US PMIs for the month of April.

EUR/USD News

GBP/USD surpasses 1.2400 on further Dollar selling

GBP/USD surpasses 1.2400 on further Dollar selling

Persistent bearish tone in the US Dollar lends support to the broad risk complex and bolsters the recovery in GBP/USD, which manages well to rise to fresh highs north of 1.2400 the figure post-US PMIs.

GBP/USD News

Gold trims losses on disappointing US PMIs

Gold trims losses on disappointing US PMIs

Gold (XAU/USD) reclaims part of the ground lost and pares initial losses on the back of further weakness in the Greenback following disheartening US PMIs prints.

Gold News

Here’s why Ondo price hit new ATH amid bearish market outlook Premium

Here’s why Ondo price hit new ATH amid bearish market outlook

Ondo price shows no signs of slowing down after setting up an all-time high (ATH) at $1.05 on March 31. This development is likely to be followed by a correction and ATH but not necessarily in that order.

Read more

Germany’s economic come back

Germany’s economic come back

Germany is the sick man of Europe no more. Thanks to its service sector, it now appears that it will exit recession, and the economic future could be bright. The PMI data for April surprised on the upside for Germany, led by the service sector.

Read more

Forex MAJORS

Cryptocurrencies

Signatures