FxWirePro: NZD/USD Tests Strong Trendline Support at 0.6848, Focus on US NFP Report
- Weak demand seen for riskier/ higher yielding assets amid persisting risk-off profile, spurred by falling oil prices as well as global equities.
- NZD/USD broke the overnight consolidation phase to the downside and is now testing major trendline support at 0.6848.
- Key risk event for today is the US payrolls data due later in the NY session. Breaks below 0.6848 could see test of 0.68 and then 0.6760.
- Fed speakers (Bullard , Lockhart, Williams, Kaplan) on the wires earlier today were optimistic about US growth, and inflation near targets. Did not give any explicit hints of the rate path.
- The growth in US employment is expected to have continued at a stronger pace in April. US nonfarm payrolls had risen by 215k in March and in April, they are likely to rise by 200k.
- The US Fed is expected to see anything stronger than a rise of 150k in payrolls as in line with continuous tightening of labor market over time.
- Upbeat unemployment report could buoy the USD, taking NZD/USD spiralling down. Test of 0.68 and then 0.6760 levels likely.
- Any miss on expectations will be a major drag on the USD. NZD/USD could see a bounce to 0.6940 levels.
- Our previous call (http://www.econotimes.com/FxWirePro-NZD-USD-shrugs-off-upbeat-jobs-data-slips-below-069-handle-good-to-sell-rallies-203768) has almost hit TP1 at 0.6848.