NZD/USD Erases Jobs-Led Gains, Back in the Red Below 0.69

NZD/USD Erases Jobs-Led Gains, Back in the Red Below 0.69

4 May 2016, 05:07
Roberto Jacobs
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NZD/USD Erases Jobs-Led Gains, Back in the Red Below 0.69

The NZD/USD pair reversed the early spike induced by upbeat NZ jobs data and fell sharply lower post-China open, having surrendered 0.69 handle.

NZD/USD shrugs-off best Q1 jobs since 2004

Currently, the NZD/USD pair trades -0.49% lower, in close proximity to the fresh session lows of 0.6879 reached last minutes. The Kiwi gave back initial gains and resumed its recent downslide from near ten-month tops as extension of the rebound in the greenback across the board overshadowed stronger than expected NZ employment change numbers released in early trades.

New Zealand economy added 38,000 jobs in the March quarter, the largest increase in 12 years, however, of those entering the labor force 10,000 failed to find jobs, while the remaining 28,000 found work. While the unemployment rate rose from a revised 5.4% in the December quarter to 5.7% last quarter.

The bird faces double whammy as the black gold deepens correction from 5-month tops on one hand, while renewed optimism towards the US dollar combined with falling dairy prices also weighed down on the NZD/USD pair. Meanwhile, the US dollar index jumps +0.20% to print fresh three-day highs at 93.22.

Now with the NZ jobs behind, focus now shifts towards the US employment data due later today ahead of the Chinese Caixin Services PMI due for release tomorrow.

NZD/USD Levels to consider

To the upside, the next resistance is located at 0.6941/43 (daily high/ 1h 20-SMA), above which it could extend gains to 0.6985/0.7000 (1h 50-SMA/ round number). To the downside immediate support might be located at 0.6822/21 (50-DMA/ daily S2) and from there to 0.6800.


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