NZD/USD dropped 50 pips as New Zealand employment data renewed fears of RBNZ’s rate cut

• The contraction in employment change highlights RBNZ’s rate cut fears.
• The US-China trade talks and FOMC might offer intermediate relief to buyers.

NZD/USD trimmed nearly 50 pips to trade around 0.6640 after quarterly New Zealand employment data renewed speculations of RBNZ’s rate cut during early Wednesday.

Even if the headline unemployment rate remain ahead of 4.3% prior to meet 4.2% market consensus during the first quarter (Q1) 2019, employment change declined to -0.2% versus +0.5% expected and 0.1% prior and participation rate weakened to 70.4% against 70.9% previous.

The employment report adds into New Zealand’s data disappointment that has already given rise to expectations of a rate cut from the Reserve Bank of New Zealand (RBNZ).

However, positive developments from the US-China trade talks may offer some relief in the meantime while today’s FOMC meeting could also please counter-trend traders if the Fed reiterates its latest dovish bias.

Technical Analysis

A five-week-old descending trend-line, at 0.6680, can restrict immediate upside of the NZD/USD pair, a break of which can propel the quote towards 0.6720 and 0.6720 ahead of confronting the 50-day and 100-day simple moving average (SMA) confluence region near 0.6780/85. 

On the downside, 0.6630, 0.6600 and 0.6580 may try disappointing bears ahead of pleasing them with 0.6510 support level.