NZD/USD on hold ahead of NZ employment data

It’s a busy week for New Zealand indicators. We’ll get a look at employment change and the unemployment rate later on Tuesday. These indicators are released on a quarterly basis, magnifying the impact of each release. On Thursday, New Zealand releases Inflation Expectations.

NZ Employment Change Looms

Analysts are braced for a soft Employment Change for Q2, which will reflect the impact of Covid-19 on the New Zealand economy, which included a lockdown in April. Employment Change is expected to decline by 2.0%, which would be the first losing quarter in over a year. The unemployment rate, which has hovered around the 4.0% level, is projected to jump to 5.6%. If these forecasts are within expectations, we could see the New Zealand dollar lose ground.

The New Zealand dollar has followed in the footsteps of its big brother, the Australian dollar. NZD/USD has climbed 10.7% since April 1, while AUD/USD is up 12.1%. Both currencies are in the risk category, which means that in times of crisis, investors would be favoring safe-haven assets. However, the US dollar is broadly lower, and the New Zealand dollar has jumped on the bandwagon. The kiwi has also been buoyed by the fact that New Zealand has successfully kept Covid-19 under control, while the virus remains unchecked in many parts of the US.

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NZD/USD Technical

NZD/USD is trading at 0.6609, down 0.04% on the day. The pair has shown little activity in the Asian and European sessions

  • 0.6593 is under pressure in support. This is followed by support at 0.6559
  • 0.6646 is the next resistance line. This is followed by 0.6679
  • USD/CAD is putting downward pressure on the 10-day MA level. A break below this line is a bearish signal

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Kenny Fisher

Kenny Fisher

Currency Analyst at Market Pulse
Kenny Fisher joined OANDA in 2012 as a Currency Analyst. Kenny writes a daily column about current economic and political developments affecting the major currency pairs, with a focus on fundamental analysis. Kenny began his career in forex at Bendix Foreign Exchange in Toronto, where he worked as a Corporate Account Manager for over seven years.