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NZD/USD carries post-NFP weakness amid fewer fresh catalysts

2019-07-08 05:40    FXYEAH
  • Upbeat US NFP derailed expectations favoring 50 basis points (bps) of the Fed rate cut.
  • Multiple failures to cross 200-day SMA also weighed on the sentiment.
  • Trade/political news can offer intermediate trade opportunities amid a lack of fresh clues.

The NZD/USD pair remains on a back foot while taking the rounds near 0.6627 at the start of the week’s trading on Monday.

The pair slumped on Friday after the US Nonfarm Payrolls (NFP) surprised markets with strong reading, pushing investors to give little importance to recent expectations of a 50 bps cut into the US Federal Reserve’s benchmark rate.

The headline job number grew past 160K market expectations to 224K. It should also be noted that traders gave little importance to the increase in Unemployment Rate (3.2% versus 3.1% prior and forecast) and a weaker Average Hourly Earnings YoY (3.1% versus 3.2% expected).

Following the employment report driven market support to the Fed’s monetary policy outlook and the US Dollar (USD), the US President Donald Trump criticized the Fed saying that the central bank “doesn’t have a clue” whilst criticizing the current monetary policy setting. He also mentioned that China is also devaluing its currency.

Moving on, today’s economic calendar has less or no major data up for release, which in turn can diver market attention towards the US-China trade story for fresh impulse.

Technical Analysis

While multiple failures to cross 200-day simple moving average (SMA), coupled with upbeat US NFP, finally dragged the Kiwi pair under 50-day SMA, May 27 high of 0.6560, followed by May 22 top surrounding 0.6511, gain sellers’ attention. Meanwhile, 100-day SMA level of 0.6690 and 200-day SMA level of 0.6712 can keep the prices in check for the short-term.

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