NZD/USD on Track to Break Three-Week Losing Streak, Eyes on NFP Report
The currency pair aims to end a three-week losing streak
The NZD/USD currency pair is showing signs of a potential turnaround, as it looks to end a three-week losing streak. In early trading today, the pair is slightly lower at $0.5890/95, trading within a narrow range below $0.59. This slight dip can be attributed to softer US equity futures. However, despite this minor setback, the pair has been steadily gaining for the third consecutive day, approaching a two-week high above 0.5900.
Factors driving the recent surge
The recent surge in the NZD/USD currency pair can be attributed to a selling bias in the USD and positive performance in equity markets. The breach of the 20-Day EMA ($0.5875) has set bullish traders’ targets at the November 2 high ($0.5917) and the $0.60 handle. On the other hand, bears are targeting the 20-Day EMA and the $0.58 handle.
Anticipation for the Non-Farm Payrolls (NFP) report
Market participants are eagerly awaiting the release of the Non-Farm Payrolls (NFP) report, which is expected to have a significant impact on the Federal Reserve’s rate decision and consequently affect the dynamics of the USD. Lower US Treasury bond yields, reflecting the market’s rate hike expectations, combined with a private-sector survey indicating expansion in China’s business activity, are supporting antipodean currencies such as NZD.
Concerns and limitations
However, concerns over China’s economic slowdown and weak domestic employment figures, suggesting an unchanged policy rate by the Reserve Bank of New Zealand (RBNZ), are limiting the rise of NZD/USD. Additionally, in political news, the NZ Nationals have lost two seats in the final election result, necessitating support from two parties for government formation. Market watchers will also be keeping an eye on important data releases next week, including Q4 Inflation Expectations, October Manufacturing PMI, and Card Spending data.
This article provides an overview of the current situation in the NZD/USD currency pair. Stay tuned for further updates on this dynamic forex market.
