NZD/USD continues its upward movement above the mid-0.6100s, with a focus on upcoming US NFP data

FUNDAMENTAL OVERVIEW:

• In Friday’s early Asian session, NZD/USD advanced near 0.6175.
• Last week’s US weekly Initial Jobless Claims were reported at 217K, below expectations.
• RBNZ’s Conway suggests a potential earlier interest rate cut if the Fed starts easing later this year.
• The focus now shifts to the US February Nonfarm Payrolls (NFP) on Friday.

During the early Asian session on Friday, the NZD/USD pair gained strength above the mid-0.6100s. The rise is fueled by the US Dollar Index (DXY) dropping below 103.00, a level not seen since early February. Investors remain attentive to the much-awaited US Nonfarm Payrolls (NFP) report scheduled for Friday, which has the potential to induce market volatility. Currently, NZD/USD is trading at 0.6175, reflecting a 0.01% increase for the day.

On Thursday, the weekly Initial Jobless Claims in the US for the week ending March 2 remained steady at a seasonally adjusted 217,000, missing the market’s anticipated figure of 215,000 from the previous week. Concurrently, Continuing Claims increased by 8,000, reaching 1.906 million in the week ending February 24, compared to the previous 1.899 million.

The robust labor market and elevated inflation figures observed since the start of the year have diminished the probability of the Federal Reserve (Fed) implementing interest rate cuts in May. During his testimony before the Senate Banking Committee on Wednesday, Fed Chair Jerome Powell expressed his belief that the peak interest rate in the United States had been reached and anticipated a reduction later in the year.

The Reserve Bank of New Zealand (RBNZ) maintained the interest rates at 5.5% during its February meeting and emphasized its commitment to maintaining tight monetary conditions to curb inflation. RBNZ Chief Economist Conway suggested on Wednesday that potential rate cuts by the Federal Reserve could lead to an appreciation of the New Zealand Dollar (NZD) and alleviate inflationary concerns. Conway further noted the possibility of the RBNZ cutting interest rates earlier than anticipated if the Fed initiates easing later in the year.

In the upcoming period, Friday will witness the release of the US labor market report for February, encompassing Nonfarm-Payrolls, Unemployment Rate, and Average Hourly Earnings. Projections indicate an estimated addition of 200,000 jobs to the US economy, with the unemployment rate expected to remain unchanged at 3.7%.

NZD/USD TECHNICAL ANALYSIS DAILY CHART:

Technical Overview:

NZD/USD is trading within an up channel.

NZD/USD is positioned above all the Moving Averages (SMA).

The Relative Strength Index (RSI) is in the Buying zone, while the Stochastic oscillator suggests a Neutral trend.

Immediate Resistance level: 0.6188

Immediate support level: 0.6154

HOW TO TRADE NZD/USD

After experiencing a notable ascent, NZD/USD retraced slightly and is currently consolidating within a range. Presently, NZD/USD is making efforts to move upward, approaching a significant resistance zone. A breakthrough in this zone could potentially lead to further upside movement.

TRADE SUGGESTION- STOP BUY– 0.6199, TAKE PROFIT AT- 0.6256, SL AT- 0.6170.