We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site.

Free Trading Guides
EUR/USD
Bullish
Oil - US Crude
Bearish
Wall Street
Mixed
Gold
Mixed
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
GBP/USD
Bullish
USD/JPY
Bullish
More View more
Real Time News
  • Trump says he will announce action on China before the week is over - BBG
  • Alright, so a breakout higher then in my #WallStreet index despite negative RSI divergence. This may have opened the door to revisiting peaks in average US stock prices from early March. Rising support from mid-May seems to be guiding the index higher (pink line) https://t.co/2dbegpLr7v
  • BOC's Poloz: - Policy from fiscal and monetary side set base for economic recovery - Uncertainty around virus remains -BBG
  • 🇰🇷 Business Confidence Actual: 49 Previous: 52 https://www.dailyfx.com/economic-calendar#2020-05-26
  • Forex Update: As of 20:00, these are your best and worst performers based on the London trading schedule: 🇦🇺AUD: 1.69% 🇳🇿NZD: 1.60% 🇨🇦CAD: 1.50% 🇪🇺EUR: 0.78% 🇨🇭CHF: 0.65% 🇯🇵JPY: 0.15% View the performance of all markets via https://www.dailyfx.com/forex-rates#currencies https://t.co/QHpL43u1ca
  • archive of today's webinar ready to go https://t.co/dCPU3X7BvY
  • Trump says virus vaccines and remedies are going to be here 'very shortly' - BBG
  • Heads Up:🇰🇷 Business Confidence due at 21:00 GMT (15min) Previous: 52 https://www.dailyfx.com/economic-calendar#2020-05-26
  • Heads Up:🇨🇦 BoC Gov Poloz Speech due at 21:00 GMT (15min) https://www.dailyfx.com/economic-calendar#2020-05-26
  • EUR/USD has rallied the best part of one big figure so far today and nears important resistance around the 1.1000/1.1020 area. Get your $EURUSD technical analysis from @nickcawley1 here: https://t.co/dJ1UzJSqHR https://t.co/1nHWYmdbIH
NZD/USD Price Confirms Trend Reversal on New Zealand Jobs Report

NZD/USD Price Confirms Trend Reversal on New Zealand Jobs Report

2018-11-06 22:30:00
Daniel Dubrovsky, Analyst
Share:

New Zealand Dollar Talking Points:

  • New Zealand Dollar shoots for the stars following a better-than-expected local jobs report
  • Unemployment rate dropped unexpectedly to decade low as average hourly earnings rose
  • NZD/USD resistance now eyed at 0.68543 ahead of US 2018 midterms, RBNZ rate decision

Find out what the #1 mistake that traders make is and how you can fix it!

As anticipated, the New Zealand Dollar soared after a better-than-expected local employment report crossed the wires. New Zealand’s unemployment rate dropped significantly from 4.4% in the second quarter to 3.9% in the third, economists were anticipating for it to hold steady at 4.4%. This marks the lowest jobless rate since the second quarter of 2008, more than ten years ago.

More good news could be found in other aspects of the data, employment rose by 2.8% y/y versus 2.0% expected and 3.7% prior. On a quarterly basis, the country increased hiring by 1.1% compared to 0.5% estimated and 0.6% in Q2. The latter was at its fastest pace in exactly one year. On top of that, the labor force participation rate unexpectedly soared to 71.1% from 70.9% which matched the 2017 record high.

Finally, average hourly earnings clocked in at 1.4% q/q versus 0.8% expected and 0.2% prior. That was the most impressive rate of pay growth since the third quarter of 2014. Overall, these statistics match the general trend of local economic news flow tending to outperform relative to economists’ expectations. This suggests that their models are underpricing the health and vigor of New Zealand’s economy.

Domestic government bond yields climbed alongside the New Zealand Dollar, hinting that the data further reduced remaining RBNZ rate cut bets. Combining this jobs report with local CPI also beating estimates in the third quarter offers a compelling argument that the Reserve bank of New Zealand may shift its forward guidance tomorrow. At the moment, they have their doors open to a rate cut and a hike as their next move.

Should the central bank shift its tone to favoring a rate hike as their next move, there may be room for more NZD gains. With that said, a result to the contrary would probably erase a lot of the significant progress the Kiwi Dollar has made recently. But for now, the New Zealand Dollar looks to the 2018 US midterm elections first. Results should cross the wires early into Wednesday’s trading session.

NZD/USD reaction to New Zealand Jobs Report

Chart created in TradingView

NZD/USD Technical Analysis

The New Zealand Dollar has at this point overturned its dominant downtrend since June. Prices are continuing to climb above the descending trend line from then. Now, resistance has been breached above 0.67207, opening the door to testing 0.68543 next. Meanwhile a descent through support exposes the February 2016 lows between 0.65454 and 0.65633.

NZD/USD Daily Chart

NZD/USD Daily Chart

Chart created in TradingView

FX Trading Resources

--- Written by Daniel Dubrovsky, Junior Currency Analyst for DailyFX.com

To contact Daniel, use the comments section below or @ddubrovskyFX on Twitter

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

DISCLOSURES

News & Analysis at your fingertips.