Nzdusd pair consolidation amid economic downturn signs in US and NZ

NZDUSD Analysis

Performance after Wednesday
Period	Pct	Chg	Momentum
Wednesday	-0.03%	-1.6 Pips
Week to-date	0.06%	3.3 Pips
April	0.7%	39.9 Pips

Upcoming key events (London Time)

Fri 01:30 PM USD Nonfarm Payroll Employment
Fri 01:30 PM USD Average Hourly Earnings (12-mth)

What happened lately

In the United States, recent economic indicators show a downturn in both manufacturing and labor sectors. New orders for manufactured goods saw a decrease in February, falling to 0.6% from a revised 1.7% in January, according to the Census Bureau. This suggests a slowdown in the manufacturing sector which could indicate hesitancy among businesses to invest in new products. Furthermore, the U.S. Job Openings and Labor Turnover Survey (JOLTS) highlighted a decrease in job openings to 7.568 million in February, down from a revised January figure of 7.74 million. This decline in job openings points towards a potential cooling of the labor market as employers respond to economic conditions by scaling back hiring.

In New Zealand, building consents for new dwellings also exhibited a decline. The seasonally adjusted figure fell to 0.7% in February from 2.6% in January, as reported by Stats NZ. This decrease suggests a contraction in construction sector activities, possibly due to rising interest rates or tighter financial conditions that have curtailed new construction projects. Such data reflects underlying challenges in the housing market which could impact the broader economic landscape in New Zealand.

The recent economic data from both countries can exert pressure on the NZDUSD currency pair. The U.S. data indicates signs of weakening growth, which could temper expectations of aggressive Federal Reserve rate hikes. Meanwhile, the decline in building consents in New Zealand may signal economic deceleration, potentially leading the Reserve Bank of New Zealand to adopt a more cautious approach towards monetary policy. Nonetheless, with the U.S. releasing high-impact data such as Nonfarm Payroll Employment and Average Hourly Earnings soon, there could be heightened volatility on the NZDUSD. Depending on the nature of these reports, we could see traders react accordingly. As of now, the NZDUSD remains in consolidation at 0.57104, with the market watching for further economic cues to determine its next directional move.

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What can we expect from NZDUSD today?

NZDUSD on Wednesday dropped -0.03% to 0.57104. Price is below 9-Day EMA while Stochastic is falling.

Updated daily direction for NZDUSD looks mixed as the pair is likely to consolidate above 0.56736 (S1).

Looking ahead today, to see upside interest, we prefer to look at price breakout of last daily high of 0.58000 or trades above daily pivot 0.57368. Break above could target R1 at 0.57736. While to the downside, we are looking at 0.56736 (S1) and daily low of 0.57000 as support levels. NZDUSD need to break on either side to indicate a short-term bias. A close below 0.57000 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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