Nzdusd dips after positive us employment data boosts dollar

NZDUSD Analysis

Performance after Thursday
Period	Pct	Chg	Momentum
Thursday	-0.16%	-8.7 Pips
Week to-date	-0.35%	-19.9 Pips
January	-0.77%	-43.5 Pips

Upcoming key events (London Time)

Fri 01:30 PM USD Nonfarm Payroll Employment

What happened lately

In the United States, the most recent employment data released by the Department of Labor shows a decrease in Initial Unemployment Insurance Claims for the week ending January 4, falling to 201,000 from the prior figure of 211,000. This decline suggests an improvement in the U.S. labor market, indicating that fewer individuals are filing for unemployment benefits. Such data is often interpreted as a sign of a strengthening economy, with more robust job growth potentially leading to increased consumer spending and boosted economic activity. Additionally, this optimistic labor market report can influence monetary policy decisions, as a stronger job market may discourage the Federal Reserve from making any immediate cuts to interest rates, supporting a stable economic environment.

The presented economic data is expected to have an impact on the NZDUSD currency pair. The U.S. labor market’s positive performance tends to bolster the U.S. dollar as investor sentiment leans towards the United States’ economic resilience. Consequently, the improvement in jobless claims strengthens the USD, exerting downward pressure on the NZDUSD exchange rate. The recorded drop of 0.16% to 0.55960 in NZDUSD on Thursday reflects the market’s immediate response to the favorable U.S. employment statistics. Furthermore, with upcoming high-impact events such as the Nonfarm Payroll Employment report, a robust job creation figure could further enhance the dollar’s appeal, potentially leading to additional depreciation of the New Zealand dollar against the U.S. dollar. The currency pair’s movements will likely hinge on the market’s anticipation and reaction to these upcoming economic indicators.

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What can we expect from NZDUSD today?

NZDUSD on Thursday dropped -0.16% to 0.55960. Price is below 9-Day EMA while Stochastic is falling.

Updated daily direction for NZDUSD looks bearish as the pair posted lower in Thursday trading session.

Looking ahead for the day, immediate support level is at S1 0.55762 with break below could see further selling pressure towards S2 at 0.55564. To the upside, with the current momentum bearish, we prefer to look at breakout of the recent daily high of 0.56064 as a potential indicator of buying interest. Failure to break the resistance level would continue to echo bearish sentiment. A close below 0.55715 would indicate selling pressure.

For the week to-date, take note that NZDUSD is mixed as compared to the prior week.

Key levels to watch out:

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