NZD/USD: Trading the New Zealand jobs report Feb 2013

New Zealand  Employment Change is an important leading indicator, which often has a significant impact on the markets. Traders and analysts carefully examine employment figures, looking for any trends which could affect  NZD/USD.  A reading  which  is better than the market  forecast is bullish for the New Zealand dollar.

Here are the details and 5 possible outcomes for NZD/USD.

Published on Thursday at 21:45 GMT.

Indicator Background

Job creation is one of the most important leading indicators of overall economic activity. The release of the New Zealand Employment Change, together with the Unemployment Rate, is  keenly anticipated by the markets.  The indicator is released each quarter, and an unexpected reading can affect the movement of NZD/USD.

Employment Change has posted two  consecutive declines,  indicating ongoing weakness in the  New Zealand employment market. The markets are   expecting a turnaround for  Q4 of 2012, with an estimate of 0.4%. Will the indicator be able to meet or beat the market’s prediction?

Sentiment and Levels

The  New Zealand  dollar has not been making waves, as it continues to trade in the mid-84 range. The New Zealand  economy  has been fairly steady,  and    the ongoing QE4 program in the US and the relative weakness of Australia could draw more funds into New Zealand. So, the overall sentiment is  positive on NZD/USD towards this release.

Technical levels from top to bottom: 0.90, 0.8842, 0.8470,  0.8360, 0.8175 and 0.81.

5 Scenarios

1. Within expectations:  0.1% to 0.7%: In this scenario, NZD/USD could show some slight fluctuation, but it is likely to remain within range,  without breaking any levels.
2. Above expectations:  0.8% to 1.1%: A reading above expectations could  push the pair  above one  resistance level.
3. Well above expectations: Above 1.1%: A sharp rise in employment  numbers could propel  NZD/USD upwards, and two or more resistance  lines could be broken.
4. Below expectations: -0.3% to 0%: A lower than expected reading could pull the pair downwards, with one support level at risk.
5. Well below expectations: Below -0.3%: A very  poor reading  could hurt confidence in the kiwi, and NZD/USD could break two  or more support levels.

For more on the kiwi, see the  NZD/USD forecast.

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