- A Sharp decline of the US dollar after NFP boosted NZD/USD to weekly highs.
- After hitting 0.7275, it pulled back, finding support above 0.7230.
The NZD/USD is moving toward the daily high it reached at 0.7275, the strongest level since April 29, after the release of the US employment report. After a pullback to 0.7230, the pair resumed the upside.
The greenback remains under pressure across the board as equity prices rise in Wall Street and amid lower US yields. The Dow Jones rises by 0.42% and the Nasdaq by 1.38%.
The weaker-than-expected employment numbers in the US did not affect markets that appear to be discounting more stimulus for a longer period of time. The economy added in April 266K jobs, against an expectation of 978K. “A number of factors weighed on the jobs recovery last month, but we suspect weakness is primarily attributable to shortages of both skilled labor and physical inputs limiting activity and thereby hiring,” explained analysts at Wells Fargo.
Despite the rally versus the US dollar, the kiwi dropped further against the aussie. AUD/NZD climbed to 1.0788, a three-day high.
If NZD/USD rises further, it will test April’s high at 0.7285, the last line of protection to 0.7300. On the flip side, a strong support emerges around 0.7230.
From the level it had a week ago, NZD/USD is trading a hundred pips higher, about to post the second-highest weekly close since April 2018.
