NZD/USD pares losses as NFP disappoints
- The NZD/USD pair sharply rebounded from the lows after NFP data missed on unemployment figures.
- The pause in the Greenback rally can only be corrective in nature and may continue the rally next week.
- The BA meeting and FOMC meeting minutes next week can provide fresh impetus to the market.
- The technical bias remains neutral to bullish for the pair.
The NZD/USD pair saw a drop under the mid-0.6900 level during the earlier New York session but managed to recover sharply. It was continuously seeing a fall in the whole week. The downfall stemmed from the hawkish comments of Jerome Powell. The pair is trading around 0.7000 handle with nearly 0.35% gains as of writing, posting around 0.40% gains on the day. However, the pair is still on the track to wrap up the week in red despite the brief bounce.
The NZD/USD rally has been fueled by the renewed weakness in Greenback. The latest nonfarm payroll report of the US showed the addition of 850,000 jobs for June. Although the data beats market expectation of 700,000 figures but failed to give support to the Dollar rally.
However, the pause in the Greenback rally can be only corrective in nature. Such a huge addition of jobs to the US economy can lead the Fed to tighten its monetary policy.
Further details revealed that the labour participation rate remained at 61.6%, while the unemployment rate slightly rose to 5.9% from the previous 5.8%. As a result, the Dollar Index lost the grounds and fell below mid-92.00.
What’s going to happen with NZD/USD?
We have FOMC meeting minutes due on Wednesday that can impart a significant change in the pair. Other than that, we have an RBA meeting next week, and NZD being a close peer and positively correlated with AUD, can find a mild impact.
NZD/USD: Short-term technical outlook
The short-term outlook is still negative, and the pair has a tendency to lose ground to 0.6940 area. Further downfall may lead the pair towards a 0.6900 handle.
On the flip side, 0.7050 is an immediate resistance, followed by 0.7090 being a near-term top. Breaking above the top may lead the rally to 0.7160.
The pair seems positive now as the price is above 20-period SMA on the 4-hour chart. The 50 and 200 SMAs are flat, negating bearish mode for the time being. The volume is also increasing, which indicates further bids for the NZD/USD.
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