- On Friday, the NZD/USD slides close to 1% during the day.
- Market sentiment is mixed, weighing on the AUD and boosting the greenback.
- January’s Nonfarm Payrolls report crushed the 150K expectations, US T-bond yields skyrocketed.
The New Zealand dollar plummets 80-pips in the North American session marches firmly towards 0.6600. At the time of writing is trading at 0.6605. European bourses closed in the red, depicting a mixed market mood. Across the pond, US equity indices fluctuate between gainers and losers, while in the FX complex, risk-sensitive currencies like the antipodeans, with the NZD down close to 1%.
It is worth noting that the US 10-year Treasury yield sits at 1.914%, retreated from 1.936%, a level not seen since December 2019, up to eight basis points in the day, underpinning the greenback, which sits at 95.41, up 0.04%.
Nonfarm Payrolls jumped above estimations, the NZD/USD tanks
In the early morning in the New York session, the US Nonfarm Payrolls for January showed that the US economy created 467K jobs, smashing the 150K, foreseen per reported by the Bureau of Labor Statistics (BLS). Since Wednesday, White House economic advisers and Philadelphia’s Fed President Harker warned that January’s employment report was expected to be bad, courtesy of a dismal ADP Private Employment report, which showed that companies slashed more than 300K jobs.
The US employment report showed that Average Hourly earnings rose by 5.7%, exerting further pressure on the Fed, as higher wages equals elevated inflation. Furthermore, the Unemployment Rate touched 4.0%, a tenth more elevated than the 3.9% estimated.
Next week, the New Zealand docket will feature Business NZ PMI, Electronic Retail Card Spending, and Business Inflation Expectations for Q1. On the US front, NZD/USD traders look forward to taking cues from the Balance Trade for December, unveiling on Tuesday, followed by the Consumer Price Index (CPI) on Thursday for January, and finally the University of Michigan Consumer Sentiment for February.
NZD/USD Price Forecast: Technical outlook
From a technical analysis perspective, the NZD/USD pair is downward biased. The NZD/USD daily moving averages (DMAs) persist above the spot price, in a bearish order, with a downward slope, signaling that the downtrend could accelerate In the near term. Friday’s price action appears to be forming a two-candle pattern, a bearish-engulfing candle, suggesting the pair might fall towards the YTD low.
That said, the NZD/USD first support would be 0.6600. A daily close under the figure would expose the January 28, daily high previous resistance-turned-support at 0.6588, followed by the YTD low at 0.6529.