Kiwi Soars Amid Strong New Zealand Employment Data

Fundamental Analysis

* Kiwi Rally: The New Zealand Dollar continues to strengthen against the USD, fueled by a stronger-than-expected employment report from New Zealand. Traders are adjusting their expectations, reducing bets on a potential rate cut by the Reserve Bank of New Zealand (RBNZ) next week. Statistics New Zealand’s data released on Wednesday revealed that the country’s Unemployment Rate increased to 4.6% in the second quarter (Q2), up from 4.3% in the first quarter but better than the anticipated 4.7%. Additionally, Employment Change rose by 0.4% in Q2, reversing the 0.2% decline from the previous quarter and surpassing the market expectation of a 0.2% decrease. These positive figures have lessened the likelihood of an RBNZ rate cut, contributing to the Kiwi’s rise against the USD.

Technical Analysis

* Technical Breakout: NZDUSD was traded higher following prior breakout above the previous resistance level 0.59850. MACD which illustrate bullish momentum signal with bullish market structure breakout suggest the pair to extend its gains.

* Resistance and Support: If the bullish momentum persists, there’s a strong likelihood that the price will potentially head towards 0.61000. Conversely, a potential reversal is also to be expected and the price could head back towards 0.58750 if the price retraces and breaks back below the level 0.59850.

Understand how technical analysis can help you in this trading opportunity.

Potential Risks

* Looking ahead, traders will be attentive to upcoming U.S. economic data, including Initial Jobless Claims. Additionally, they will be watching the release of China’s July Consumer Price Index (CPI) on Friday for potential new market trends. A weaker-than-expected CPI reading or indications of an economic slowdown in China could influence the New Zealand Dollar, given the strong trading relationship between China and New Zealand.

Know how to manage trading risks with risk management strategies.

Monitoring

Stay updated on US and New Zealand data, central bank updates and any shifts in the US Dollar’s strength by following PU Prime’s market insights and daily financial news.

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Disclaimer: Trading derivatives involves high risks, and market conditions can change rapidly. The content is for informational purposes only and should not be considered as financial advice. Traders should conduct their own research and consider risk management strategies.