The New Zealand dollar (NZD/USD) is struggling to maintain its greatest daily advances in eight weeks.
Market sentiment increased following the NFP, but bulls remain cautious.
Virus fears in Australia, as well as Sino-US tussles, are putting downward pressure.
China Caixin Services, New Zealand ANZ Commodity Price Index The PMI can influence nearby movements, and market liquidity may be reduced due to US holidays.
As Asian traders prepare for Monday’s trading, the New Zealand dollar rises after bouncing off a two-week low around 0.7030. The kiwi pair had a risk-on day the day before, registering its biggest daily gain since early May. The mood seems to be influenced by the US jobs figures. Macro challenges, on the other hand, return to the table to put the recent recovery moves to the test.
Despite initially fuelling the US dollar, conflicting US employment data for June helped NZD/USD to cut weekly losses. The headline Nonfarm Payrolls (NFP) surpassed the 700K projection and was revised upwards from 583K previously. Though, analysts were worried by an increase in the unemployment rate to 5.9% from 5.8%, versus 5.7 percent market estimate, and no change in the participation rate of 61.6 percent, analysts were troubled in anticipating the Fed’s next moves.
Despite the fact that a solid NFP originally pushed the US dollar higher, shares rose after reading the details. The same backed up the greenback’s profit-booking moves in favor of the NZD/USD consolidation.
It should be emphasized, however, that the likelihood of the Fed’s next steps are still split, putting downward pressure on the Antipodeans. Concerns about the coronavirus (COVID-19) in Australia’s major consumer, as well as Sino-American squabbles, could influence the quote.
In the midst of these maneuvers, US Treasury yields fell 4.9 basis points (bps) to 1.43 percent, while Wall Street benchmarks ended the day in the green, with S&P 500 Futures recording the seven-day uptrend to re-establish the record high.
The New Zealand ANZ Commodity Price Index for June, which is predicted to be 1.2 percent versus 1.3 percent, may provide immediate direction to NZD/USD buyers looking for new hints around the significant upward hurdle. China’s Caixin Services PMI for June is also in the works for publication in Asia, with a market consensus of 55.7 vs 55.1 in previous readouts. It should be noted, however, that a US holiday may limit pair swings in the late hours, however risk catalysts may try to entice intraday traders.
The NZD/USD pair’s current rally is supported by a shrinking divergence between MACD and signal line, as well as recently recovering RSI circumstances. Nonetheless, ahead of the 200-DMA level of 0.7060, a downward sloping trend line from early June, centered around 0.7045, becomes a potential key hurdle for the bulls to overcome./n
