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NZD/USD drops sharply to 0.6600 after NFP, amid a stronger USD

2019-07-06 00:00    OctaFX
  • US Dollar jumps after better-than-expected NFP, DXY extends weekly gains. 
  • NZD/USD tumbles to 0.6600, on the worst slide in weeks. 

The NZD/USD pair is falling sharply on Friday, with the Kiwi among the worst performers. It broke below 0.6655 after the release of the NFP and bottomed at 0.6600, the lowest level since June 26. As of writing, trades at 0.6615, 70 pips below yesterday’s close, posting the worst daily result in a month. 

Data from the US Bureau of Labor Statistics showed the US economy created 224K jobs in June, surpassing expectations of a 160K reading. Market participants were biased toward a negative surprise as data released over the week showed a slowdown in the labor market. The positive surprise tempered even more Federal Reserve rate cut expectations and sent US yields to the upside. The US Dollar rose across the board and the Kiwi tumbled also affected by the decline in equity prices. 

“The headline surprise benefited the USD, offering a theme of strong growth and muted inflation. That does little to alter the easing narrative linked to the Fed and benefits the buck against the low-yielders. Still, a mix of low real rates and subdued volatility offers mixed signals for the broad USD”, wrote TDS analysts. 

Levels to watch 

NZD/USD dropped back below the 20-day moving average that stands at 0.6630. The decline was capped by the 0.6600 zone that has become the key short-term support. Below attention would turn to 0.6580 and 0.6555. On the upside resistance levels might be seen at 0.6625, 0.6655 (July 2 low) and 0.6675 (July 4 low). 

 

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