NZD/USD is subdued during the Asian session, set for consolidation amidst the lack of catalyst
- NZD/USD is up by 0.02%; anticipates consolidation within 0.6130/0.6200 range before US Nonfarm Payrolls, on Friday,
- Sour market mood reflected in negative US equity market close; ADP Employment Change and widened trade deficit weigh on sentiment.
- Despite data indicating labor market easing, Non-Manufacturing PMI and Q3 GDP above 5% threshold signal solid US economic growth.
The NZD/USD trades with a softer tone as Thursday’s Asian session begins, virtually unchanged up by 0.02% following Wednesday’s upbeat session. Nevertheless, the pair is set to consolidate at around the 0.6130/0.6200 range ahead of the US Nonfarm Payrolls data. At the time of writing, exchanges hands at 0.6138.
NZD/USD at the mercy of Chinese data, and US unemployment claims on Thursday
The US equity markets closed negatively, portraying a sour market mood. the US ADP Employment Change report underscored the deceleration in hiring momentum, as it missed estimates, while the trade deficit widened as exports slipped 1%, while imports grew 0.2%. Even though data was mainly ignored by market players getting ready for Friday’s US Nonfarm Payrolls report, expectations for rate cuts by the Federal Reserve (Fed) eased somewhat from 138 basis points of rate cuts to 130.
Despite that, the greenback remains in the driver’s seat as shown by the US Dollar Index (DXY), which tracks the currency against other peers, stands at 104.15 gains 0.19%.
Today’s US data, added to October’s JOLTs report, suggests the labor market is easing, However, Non-Manufacturing PMI figures, along with the latest week’s Gross Domestic Product (GDP) report for the third quarter above the 5% threshold, suggests the economy remains solid and growing above trend. That would warrant further action by the Fed, though market plays had prices in the US central bank will keep rates unchanged.
On the New Zaland front, the docket is scarce but traders would eye the release of the Balance of Trade in Australia and China.
NZD/USD Price Analysis: Technical outlook
Although the pair is trading at around weekly lows, further downside is needed, below the current week’s low of 0.6125, if the NZD/USD sellers are going to challenge the 200-day moving average (DMA) at 0.6088. Once cleared, the next stop would be the October 22 high at 0.6055. On the other hand, if the pair stays above 0.6100, a catalyst could drive the pair toward the next resistance level seen at 0.6200. Upside risks lie at 0.6225, July 31 daily high.