NZDUSD on Friday rose 0.4% to 0.59570. Week ending 2024-08-02 rose 1.15%. What happened.

NZDUSD Analysis

Performance
Period	Pct	Chg	Momentum
Friday	0.4%	24 Pips
Week 2024-08-02	1.15%	68 Pips
August	0.09%	5.2 Pips

Upcoming key events for the new week (London Time)

Tue 11:45 PM Employment Change
Thu 04:00 AM RBNZ Inflation Expectations (3-mth)
Thu 01:30 PM Initial Unemployment Insurance Claims

What happened over the week

In the United States, several key economic indicators reflected a slowdown in economic activity. Factory orders in June declined sharply by -3.3%, down from -0.5% in May (reported by the Census Bureau). Average hourly earnings in July dropped to 0.2% compared to 0.3% in June, and nonfarm payroll employment decreased significantly to 114,000 from 179,000 in June, which had been revised down from 206,000 (source: Bureau of Labor Statistics). Additionally, the Q2 flash estimate for unit labor costs fell to 0.9% from 4% in Q1, and the nonfarm business labor productivity in Q2 improved to 2.3% from 0.2% in Q1. Initial unemployment claims for the week ending 27 July increased to 249,000 from 235,000 the previous week (source: Department of Labor). The Federal Reserve kept the interest rate unchanged at 5.5% (source: Federal Reserve), and the Employment Cost Index in Q2 declined to 0.9% from 1.2% in Q1. Moreover, the Job Openings and Labor Turnover Survey (JOLTS) indicated a slight drop in job openings in June to 8.184 million from 8.23 million in May. The U.S. House Price Index in May remained unchanged at 0%, after being 0.3% in April (source: FHFA).

New Zealand reported a significant decline in seasonally adjusted building permits for June, which fell to -13.8% from a revised -1.9% in May (source: Stats NZ).

The weakening economic data from the United States, particularly the considerable decline in factory orders, nonfarm payrolls, and average hourly earnings, suggests a softer economic outlook. This could lead to expectations of a more dovish stance from the Federal Reserve in the future, potentially weakening the U.S. dollar. Conversely, although New Zealand’s building permits showed a sharp decline, the overall risk sentiment and relative economic performance have strengthened the NZD. Consequently, the NZDUSD rose by 0.4% to 0.59570 on Friday and saw a weekly increase of 1.15% for the week ending on 2nd August 2024. The relative underperformance of U.S. economic data compared to expectations likely contributed to these movements.

From X (Twitter)

Latest release: Home consents down 24 percent in year ended June 2024.https://t.co/CcSdeGaqvF pic.twitter.com/qNogMnt2Bn

— Stats NZ (@Stats_NZ) July 30, 2024

What can we expect from NZDUSD for the new week and what happened on Friday?

NZDUSD on Friday rose 0.4% to 0.60. Price is above 9-Day EMA while Stochastic is rising. For the week ending 2024-08-02, the pair rose 1.15% or 68 pips higher.

Looking ahead, NZDUSD looks bullish as the pair ended higher after Friday trading session.

For the new week, our technical outlook is mixed. To see upside interest, we prefer to look at price breakout of week high of 0.60 or at least consolidates above Weekly Pivot level of 0.59. On the downside, we are looking at week low 0.59 or 0.59 (WS1) as immediate support level. NZDUSD need to break on either side to indicate a short-term bias. A break above 0.60 would suggest bullish bias after recent positive movement.

For the month of August, NZDUSD is up by 0.09% or 5.2 pips higher.

Weekly key levels to watch out:

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