NZD/USD: bears take control towards 0.7400 after big miss in NZ employment change

Currently, NZD/USD is trading at 0.7471, up 0.05% on the day, having posted a daily high at 0.7476 and low at 0.7467.

NZD/USD had stabilised in the early Asian session but took a hit on the NZ jobs data where the bird fell to complete a reversal of the 26th July rally to 0.7557 YTD high. 

The big miss in the Employment change q/q: -0.2% vs the expected 0.7%, and prior at 1.1% that was revised from 1.2% sent the bears off on this occasion coupled with the equally large miss y/y at 3.1% expected 4.1% vs prior 5.7%.

Forex today: dollar retains 93 handle, commodity bloc worst performer

For the day ahead, analysts at Westpac suggest that the bird is vulnerable to correcting further towards 0.7400 adding that stretched technical indicators and stretched long positioning argue for a decent downward correction in the medium term, between 1-3 months. "But until the broad US dollar starts to recover from its seven-month old decline, the NZD can remain elevated. Eventually, if the Fed’s normalisation cycle pushes US interest rates and the US dollar higher, NZD/USD could fall to 0.6800 by year end (28 July)," argued the analysts. 

NZD/USD levels

To the upside, 0.7480 is the first key resistance ahead of 0.7520/25 double top highs. the 21st July high was 0.7557. On follow through, 0.7744 were the April 2015 highs ahead of the opening highs for that year at 0.7889. To the downside, 0.7400, 0.7386, 0.7280, (11th July high), 0.7205/06 June 22/21 lows; 0.7186 June 15 low; 0.7150 June 5 high; 0.7127 June 6 low. On the wide, on a break below 0.7080/00 opens 0.6970.