NZD/USD recovers following mixed NFPs from the US

• NZD/USD jumped above the 0.6100 threshold but is poised to close a third consecutive weekly loss.
• Headline NFPs came in lower than expected, while wages increased in July.
• The focus is set on next week’s CPI figures from July.

At the end of the week, the NZD/USD rosed but will close a third consecutive weekly loss. Labour market data from the US came in mixed, and the USD DXY index weakened, falling below 102.00. That said, the sector continues to signal to remain unbalanced, which may limit the Greenback’s losses via steady hawkish bets on the Federal Reserve (Fed). On the other hand, New Zealand’s calendar won’t have anything relevant to offer.

Nonfarm Payrolls from the US showed mixed data. The headline showed 187,000 jobs created in July, lower than the 200,000 expected but above the revised figure of 185,000. In addition, Average Hourly Earning increased by 0.4% in the same month, above expectations, while the yearly figure rose to 4.4%. Furthermore, the Unemployment rate came in slightly lower than expected at 3.5% vs 3.6% expected. 

According to the CME FedWatch tool, the odds of a 25 basis point (bps) hike in September remain unchanged, while the probabilities of an increase in November slightly rose near 30%. As the Federal Reserve (Fed) will remain data dependent, the next set of inflation data to be released next week will help investors model their expectations and affect the USD price dynamics. 

NZD/USD Levels to watch

The daily chart indicates a neutral to bullish technical outlook for NZD/USD in the short term. Although the Relative Strength Index (RSI) and the Moving Average Convergence Divergence (MACD) are still negative, they display encouraging signs of strength. Moreover,the pair is below the 20,100 and 200-day Simple Moving Averages (SMAs), indicating that the sellers dominate the broader perspective, and the buyers need to increase their efforts. In line with this, the bearish outlook on the weekly chart is more evident as the pair is set to close a third consecutive weekly loss, having declined nearly 4% since mid-July.

Support levels:  0.6100,0.6060, 0.6050.
Resistance levels:0.6130, 0.6150, 0.6200. 

 

NZD/USD Daily chart