NZD struggles on disappointing jobs numbers

Four key markets in focus today: NZD/USD, EUR/USD, US 500 cash and Cochlear.

Source: Bloomberg


The pair has struggled ever since breaking the key uptrend support on July 25 and looks like it is on the verge of extending these losses. This uptrend support line had been in place since February and with the RBNZ now looking like it’ll pause on rates for a while, there is room for further NZD downside. The NZD is also coming under pressure from a dairy price slide. Additionally, the USD is gaining traction from increasingly hawkish Fed speak. NZD/USD is currently testing the 50% retracement of the February to July rise. With jobs numbers out of New Zealand missing estimates this morning, there could be room for further near-term weakness.


The pair recently traded at a low of 1.3367 and is now on the verge of breaking to new lows. This level was its lowest since November 2013 and with the USD in a good position, there is chance these losses will extend. With Ukraine/Russia tension escalating yet again, the euro is bound to come under pressure. On the economic front we have German factory orders and Italian industrial production to look out for. Traders could be looking at momentum plays on the pair as weakness remains rampant.

US 500 Cash

The retreat in equities will continue to rattle confidence in the near term. However, for some this actually presents some buying opportunities as the ‘stretched valuations’ fear was well documented. Having said that, there is support in the 1923 region which is where the 38.2% retracement of the April to July rally lies. This level might encourage some near-term buying, but given the fact it has now been tested a few times, vulnerability has increased. Later in the US we have June trade balance and 24 S&P 500 companies reporting.


After a strong performance on the back of its FY results yesterday, traders will be looking to see if the stock can maintain its momentum in today’s trade. Brokers have also started updating their price targets on the stock as they play catch up to the price action. Perhaps the round-number resistance at $70 will come into play in the near term. 

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