Late last night, New Zealand’s employment data topped forecasts. While NZDUSD was relatively unchanged following the report, there are a couple more reasons why the currency pair could rally soon. As of this writing, NZDUSD is trading around its opening price at 0.6051.
According to Statistics New Zealand, the country’s employment change for Q1 2020 posted a 0.7% growth rate. This impressively beat forecasts which were for a 0.2% contraction. On top of that, the reading for Q4 2019 was upwardly revised to 0.1% from 0.0%. Consequently, the country’s unemployment rate ticked lower from 4.4% to 4.2%.
Additionally, New Zealand Prime Minister Jacinda Ardern beamed with optimism for the country as it begins to recover from the coronavirus. According to her, New Zealand now has a “safe haven strategic advantage” because of its swift response to the pandemic. She also added that the technology giant Microsoft plans to open a data centre in the region.
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On the 4-hour time frame, NZDUSD is seen testing a confluence of support. This price, around 0.6050, coincides with the 100 SMA. Secondly, when connecting the lows of March 19, April 22, and May 4, the currency pair is also testing trendline support. A bullish close above yesterday’s highs at 0.6076 could mean that buyers are on their way to drive NZDUSD to its April 30 highs at 0.6175.
But of course, nothing is set in stone and the currency pair could still drop. With this said, be wary of a strong close below the low of April 4 at 0.6008 which would invalidate this support level. It may suggest that the currency pair is headed lower to its April 23 lows at 0.5910.