Nzdusd experiences slight drop amid New Zealand’s weak job market indicators and U.S. manufacturing uptick

NZDUSD Analysis

Performance after Tuesday
Period	Pct	Chg	Momentum
Tuesday	-0.03%	-1.8 Pips
Week to-date	0.32%	19.4 Pips
November	0.45%	26.9 Pips

Upcoming key events (London Time)

Thu 07:00 PM USD Fed Interest Rate Decision (Federal Funds Rate)

What happened lately

New Zealand’s labor market exhibited a decline in key indicators during the third quarter, as recorded by Stats NZ. Employment Change registered a decrease to -0.5%, a significant drop from the previous positive growth of 0.4% in the second quarter. This was echoed in the Labour Force Participation Rate, which fell to 71.2% from a previous level of 71.7%. The Labour Cost Index also showed a downward trend, with a decline to 0.6% from 0.9% in the preceding quarter. Furthermore, the unemployment rate in New Zealand increased to 4.8%, up from 4.6% in the second quarter. These figures collectively point to a weakening job market and reduced wage growth pressures within the country.

In the United States, the manufacturing sector saw a slight improvement in new orders for manufactured goods in September. According to the Census Bureau, the orders adjusted the previous decline to -0.5% from a revised -0.8% in August, suggesting a modest recovery in demand for manufactured goods.

The recent economic data from New Zealand, reflecting a weakening labor market, has the potential to exert downward pressure on the NZDUSD currency pair. A contraction in employment and a rising unemployment rate may lead to expectations of accommodative monetary policy from the Reserve Bank of New Zealand, aimed at stimulating economic recovery. Additionally, declining wage growth indicated by the Labour Cost Index can also contribute to decreased consumer spending, further dampening economic momentum. Meanwhile, although the U.S. data suggests only a slight improvement, it could be seen as a stabilizing factor for the U.S. dollar. In such scenarios, the NZDUSD is likely to remain under consolidation pressure, with potential for the U.S. dollar to strengthen if forthcoming economic data, such as the anticipated Federal Reserve interest rate decision, leans towards maintaining or tightening current policy. This environment could lead to speculative movements around the upcoming events, keeping the currency pair volatile.

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What can we expect from NZDUSD today?

NZDUSD on Tuesday dropped -0.03% to 0.59984. Price is below 9-Day EMA while Stochastic is rising.

Updated daily direction for NZDUSD looks mixed as the pair is likely to consolidate above 0.59714 (S1).

Looking ahead today, to see upside interest, we prefer to look at price breakout of last daily high of 0.60149 or trades above daily pivot 0.59932. Break above could target R1 at 0.60201. While to the downside, we are looking at 0.59714 (S1) and daily low of 0.59662 as support levels. NZDUSD need to break on either side to indicate a short-term bias. A close below 0.59662 would indicate selling pressure.

For the week to-date, take note that NZDUSD is mixed as compared to the prior week.

Key levels to watch out:

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