NZD/USD
is currently trading at 0.6587 with a high of 0.6669 and a low of 0.6574.
NZD/USD has started to stabilize in the vicinity of the 0.66 handle,
with a 25 dip below there today while the greenback continues to gather pace in
respect of bullishness in data and Yellen voicing hawkish remarks with the
December meeting around the corner. The data today supports a rate hike in
December and the key component this week will come from the Nonfarm Payrolls
report on Friday. Analysts at Danske Bank expect the October
job growth to keep December hike in play.
Valeria
Bednarik, chief analyst at FXStreet explained however, "Still,
there are no guarantees the FED will act before the year end, and regardless
market's beliefs, the Nonfarm Payroll report can be a double edge knife, with
more chances of denying the move than confirming it." ... And here is
why...
Meanwhile, casting minds back to yesterday, despite
the performance of US data today and forthcoming, the picture is not rosy for
the NZ economy and the bird may be pressured on its own accord. Yesterday, a
combination of Fonterra's dairy auction and jobs data weighed on the bird. The
kiwi dropped after the employment change was offering a big miss at -0.4% vs
0.4% expected and 50.9 previous. At the same time, the Participation rate was
68.6% vs an expected 69.3%, while prior was 69.3% and wages growth were also
disappointing. The Fonterra gauge of dairy prices fell 7.4% from previous
auction.
NZD/USD levels
Technically, the downside
is playing out now below the key 0.6620 support, turned resistance. This was a
level that was guarding a continuation of the bearish trend with current
lows/0.6588 as the target that was reached earlier today and where price now
consolidates. The 200 SMA on the 4hr is at 0.6610 and this may prove to be a
solid support ahead of a breakout to 0.6515 and the 55 DMA.
