NZD/USD drops to test bull's commitment after big miss in unemployment rate

Currently, NZD/USD is trading at 0.7305, down -0.43% on the day, having posted a daily high at 0.7348 and low at 0.7303.

NZD/USD dropped out of its perch and has tested the bull's commitments at te 0.7300 level, eroding 60 percent of the previous rally from below 0.7280. The catalyst was, of course, the jobs data for the fourth quarter where the earthquakes may have had an impact. the headline for the unemployment rate for Q4 arrived at 5.2% vs expected 4.8% and that is a big miss sending the bird lower. 

Analysts at Westpac suggest that the month ahead could see NZD/USD extending beyond 0.7500 (Sep high) if the US dollar continues to register disappointment in the Trump Administration’s policies. "Further ahead, though, the Fed’s tightening cycle plus US fiscal expansion should maintain upside pressure on US interest rates and the US dollar, pushing NZD/USD lower to 0.7000," added the analysts and noted that the NZ economy is strong and dairy prices have risen but said these forces are subservient to the US dollar’s trend.

Markets - Get ready for a surprise!

Support levels

S1 0.7268, S2 0.7263, S3 0.7257.

NZD/USD sentiment