NZD/USD A Weekly Analysis

Forex trading, NZD/USD fluctuations, economic analysis

NZD/USD Surges Above 0.6100 Threshold Amid Uncertainty

The NZD/USD currency pair has been making significant moves lately, surpassing the critical 0.6100 threshold. However, it faces uncertainty as it heads for a third consecutive weekly loss. The recent release of the Nonfarm Payrolls (NFPs) data disappointed the market sentiment. In this article, we’ll delve into the latest economic developments and explore the potential implications for NZD/USD.

Nonfarm Payrolls (NFPs) Report and its Impact

The NFPs data revealed that job creation fell short of expectations, with only 187,000 jobs added in July, missing the predicted 200,000 mark. Nevertheless, there is a glimmer of hope as this figure improved from the revised 185,000. Additionally, July saw an increase in wages, with Average Hourly Earnings rising by 0.4%, surpassing expectations, and reaching a yearly figure of 4.4%. The Unemployment Rate also performed better than predicted, standing at 3.5% compared to the forecasted 3.6%.

Market Focus: Consumer Price Index (CPI) Figures

Next week’s Consumer Price Index (CPI) figures for July will shed further light on the economic outlook and may influence the NZD/USD pair. It is crucial for traders to closely monitor these figures to make well-informed decisions.

USD DXY Index and Federal Reserve’s Actions

Despite mixed results in the US labor market data, the USD DXY index weakened and dipped below the 102.00 mark. However, the market anticipates an unbalanced sector, leading to steady hawkish bets on the Federal Reserve’s (Fed) actions. This suggests that the Greenback’s losses might be limited in the coming days. As the Fed’s actions are data-dependent, investors await the next inflation data release, which will play a crucial role in shaping expectations and impacting the USD price dynamics.

New Zealand Economic Calendar and Kiwi’s Outlook

With no significant economic events scheduled in the New Zealand economic calendar, the Kiwi is at the mercy of broader market dynamics. The NZD/USD pair is more likely to be influenced by global events and the market’s perception of risk.

Technical Outlook: NZD/USD Levels to Watch

Analyzing the daily chart, the NZD/USD pair presents a neutral to bullish technical outlook in the short term. Although the Relative Strength Index (RSI) and Moving Average Convergence Divergence (MACD) indicators are still negative, they show signs of potential strength. Presently, the pair trades below the 20, 100, and 200-day Simple Moving Averages (SMAs), indicating a prevailing bearish sentiment with sellers dominating the broader perspective. Buyers will need to demonstrate substantial efforts to reverse the trend.

Weekly Perspective

On the weekly chart, the bearish outlook is more pronounced, with NZD/USD set to conclude a third consecutive weekly loss, representing a nearly 4% decline since mid-July. Traders should closely monitor the key support levels at 0.6100, 0.6060, and 0.6050, as well as the resistance levels at 0.6130, 0.6150, and 0.6200.

In these volatile times, it’s crucial for traders to stay vigilant and well-informed while making decisions in the foreign exchange arena. The upcoming Consumer Price Index (CPI) figures and the Federal Reserve’s actions will be critical factors influencing the future movements of the NZD/USD currency pair. Understanding the technical outlook and monitoring key support and resistance levels are essential for successful trading.

 

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