- NZD/USD has shown a decent recovery above 0.6170 as USD Index has sensed selling pressure.
- As per the consensus, the US economy added 150K jobs in April lower than the former additions of 145K.
- NZD/USD is continuously facing pressure near the downward-sloping trendline plotted from 0.6386.
The NZD/USD pair has scaled sharply above the immediate resistance of 0.6170 in the early Tokyo session. Earlier, the Kiwi asset witnessed an intense sell-off on Monday after failing to claim the round-level resistance of 0.6200.
The US Dollar Index (DXY) has sensed sheer selling pressure near its two-week-old resistance of 102.20. It seems that investors are digesting pre-Federal Reserve (Fed) policy anxiety.
Wednesday’s New Zealand and United States Employment data will be keenly watched. NZ’s Employment Change (Q1) is expected to remain steady at 0.2%. While the Unemployment Rate is seen rising to 3.5% from the former release of 3.4%.
On the US front, investors will keep an eye on Automatic Data Processing (ADP) Employment data. As per the consensus, the US economy added 150K jobs in April lower than the former additions of 145K.
NZD/USD is continuously facing pressure near the downward-sloping trendline plotted from April 05 high at 0.6386 on an hourly scale. The Kiwi asset has made a higher high after a lower high lower low structure, hinting for a potential bullish reversal ahead.
The New Zealand Dollar is facing immediate selling pressure near horizontal resistance placed from April 20 high at 0.6204.
Meanwhile, the Relative Strength Index (RSI) (14) has slipped back into the 40.00-60.00 range, indicating consolidation ahead.
Should the asset break above April 20 high at 0.6204, kiwi bulls will drive the asset towards April 19 high at 0.6227 followed by April 07 high at 0.6265.
In an alternate scenario, a breakdown of April 26 low at 0.6110 will drag the asset toward March 08 low at 0.6088 followed by the 15 Nov 2022 low at 0.6058.
NZD/USD hourly chart
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The New Zealand Dollar (NZD) against the US Dollar (USD) rebounded firmly on Thursday as traders look ahead to the US-NZ employment report. The NZD/USD pair is trading comfortably above the 0.6170 support level, which has proven to be a strong pivot point in the past few days’ trade.
The pair has been volatile this week, as the strength of the US Dollar against the New Zealand Dollar has seen wild swings in both directions. However, the pair has been able to stay above the 0.6170 level, which has been key in helping the pair find a footing. Technical traders have been watching this level carefully since it was last tested on February 10th.
The current rebound in the pair is largely attributed to the anticipation of the US/NZ employment report. This report will provide an insight into the health of the labor market for both nations.
Analysts expect that the report will show continued growth in employment for both countries, which should help to support the NZD. The focus will also be on the average hourly wages in both countries, which can provide clues as to the underlying inflationary pressures.
Overall, the NZD/USD pair appears to have found a footing around the 0.6170 point. If the US/NZ employment report comes in positively, the pair could move higher over the coming days. However, the downside risk should remain in the near term, as further strength in the US Dollar could put pressure on the pair.