NZD/USD pops and drops, still above 0.6050, on mixed NZ employment data
- NZD/USD shows mixed reaction to better than expected unemployment rate confronting downbeat Labor Cost Index.
- RBNZ forecasts a huge drop in 2020 GDP with likely varied impacts on different sectors.
- Risk-tone remains mildly bid amid hopes of US economic restart, virus cures.
- US data, virus updates and trade-war signs will be the key.
NZD/USD drops to 0.6060, following an initial spike to 0.6070, after New Zealand employment data published during Wednesday’s Asian session.
The kiwi pair initially cheered better than expected prints of the headline Unemployment Rate and Employment Change. However, the recent pullback seems to have taken clues from the soft print of Labor Cost Index YoY, to 2.0% from 2.5% expected and 2.4% prior.
Earlier during the day, the Reserve Bank of New Zealand (RBNZ) came out with the downbeat economic forecasts suggesting a 37% drop in GDP under level 4 of the lockdown time.
The pair earlier benefited from the hopes of the US economic restart, based on US President Donald Trump’s upbeat comments. Additionally, a heavy rush to find the cure of the pandemic also favors the market’s mood.
While portraying the same, the S&P 500 Futures register mild gains of 0.10% to 2,865 by the press time.
Looking forward, a lack of major data can help the pair to extend the latest recovery mode. However, Aussie Retail Sales can offer immediate direction.
Technical analysis
A confluence of 50-day SMA and an ascending trend line since March 23, 2020, seems to limit the pair’s immediate downside around 0.6035/40, a break of which can recall April 23 low of 0.5910. Meanwhile, buyers are targeting April top of 0.6176 with 0.6100 being the nearby resistance.