- NZD/USD is set to finish the week with gains of 2.56%.
- The November US Nonfarm Payrolls suggested a tight labor market, so the Federal Reserve needs to keep hiking rates.
- NZD/USD Price Analysis: Daily close above 0.6400 exacerbates a rally towards 0.6570s.
The New Zealand Dollar (NZD) climbed against the US Dollar (USD) for the fourth consecutive day, spurred by a weaker USD. An upbeat employment report on the United States (US) suggested the Federal Reserve (Fed) might need to keep hiking rates to ease a contracted labor market, though it failed to underpin the US Dollar. Therefore, the NZD/USD is trading at 0.6404, above its opening price by 0.54%.
Wall Street finished the week lower. The US Department of Labor (DoL) revealed that November Nonfarm Payrolls rose 263K above estimates of 200K but trailed October’s data, revised up 284K, adding pressure on the Federal Reserve (Fed). Delving into the data, Average Hourly Earnings rose by 5.1% YoY, up from October’s 4.9%, adding to inflationary pressures, while the Unemployment Rate persisted around 3.7%.
Following the November employment report, the Federal Reserve would need to continue tightening borrowing costs, albeit on 50 bps sizes. In the last monetary policy press conference, Fed Chair Jerome Powell said that the pace of tightening it’s not as important as how high the Federal Funds rate (FFR) needs to be. Some Fed policymakers had forecasted the FFR to end at around 5% to 5.25%.
Federal Reserve’s decision to moderate hikes was justified by an Institute for Supply Management (ISM) Manufacturing PMI report for November. The index dropped to the contractionary territory at 49.0 but also portrayed conditions deteriorating. The data reignited recession fears as the US central bank continues to tighten policy. Indeed, the Federal Reserve is trying to slow the economy, accounting for below-trend growth, as the Fed Chair Powell had said.
Aside from this, an absent New Zealand (NZ) economic docket keeps NZD/USD traders adrift to US Dollar dynamics. It should be said that the Kiwi has rallied on broad US Dollar weakness. On the data front, the NZ Business Confidence report in November fell 14 points to -57.1 compared to October’s reading. Respondents foresee the economy deteriorating over the next year, while some respondents expect their business to shrink in the next 12 months.
NZD/USD Price Analysis: Technical outlook
From a technical perspective, the NZD/USD remains upward biased after surpassing the 200-day Exponential Moving Average (EMA) on Wednesday. Notably, during Friday’s session, the NZD/USD reached a daily low nearby the November 30 high of 0.6399 but bounced off and reclaimed the 0.6400 figure. After the major achieved a daily close above 0.6400, a test of the June 2022 high of 0.6576 is on the cards. The Relative Strength Index (RSI) in overbought territory suggests the NZD/USD might consolidate within the 0.6350-0.6400 range, while the Rate of Change (RoC) confirms that buyers remain in charge.
Therefore, the NZD/USD key resistance levels are the August 12 high of 0.6468, followed by the 0.6500 figure, and the June 2022 high of 0.6575.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
EUR/USD struggles to hold above 1.0400 as mood sours
EUR/USD stays on the back foot and trades slightly below 1.0400 following the earlier recovery attempt. In the absence of high-tier data releases, the negative shift seen in risk mood helps the US Dollar gather strength and forces the pair to stretch lower.
GBP/USD declines toward 1.2500 on renewed USD strength
GBP/USD loses its traction and declines to the 1.2500 area in the second half of the day on Monday. The US Dollar (USD) benefits from safe-haven flows and weighs on the pair as investors await US Consumer Confidence data for December.
Gold drops below $2,620 as US bond yields edge higher
After starting the week in a quiet manner, Gold comes under bearish pressure and retreats below $2,620. The benchmark 10-year US Treasury bond yield stays in positive territory above 4.5%, making it difficult for XAU/USD gain traction.
Bitcoin fails to recover as Metaplanet buys the dip
Bitcoin hovers around $95,000 on Monday after losing the progress made during Friday’s relief rally. The largest cryptocurrency hit a new all-time high at $108,353 on Tuesday but this was followed by a steep correction after the US Fed signaled fewer interest-rate cuts than previously anticipated for 2025.
Bank of England stays on hold, but a dovish front is building
Bank of England rates were maintained at 4.75% today, in line with expectations. However, the 6-3 vote split sent a moderately dovish signal to markets, prompting some dovish repricing and a weaker pound. We remain more dovish than market pricing for 2025.
Best Forex Brokers with Low Spreads
VERIFIED Low spreads are crucial for reducing trading costs. Explore top Forex brokers offering competitive spreads and high leverage. Compare options for EUR/USD, GBP/USD, USD/JPY, and Gold.