- The NZD unemployment rate unexpectedly ticked higher and exerted some pressure.
- US-China trade optimism attracted some dip-buying and helped limit the downside.
- A modest pullback in the US bond yields weighed on the USD and remained supportive.
The NZSD/USD pair reversed an early dip to one-week lows and is currently placed near the top end of its daily trading range, around the 0.6380-85 region.
The pair extended its recent pullback from three-month tops and witnessed some follow-through selling for the third consecutive session on Wednesday in reaction to weaker than expected New Zealand employment details.
Trade optimism helped limit the downside
In fact, the unemployment rate unexpectedly ticked higher to 4.2% during the third quarter of 2019 and raised odds of another rate cut by the Reserve Bank of New Zealand (RBNZ) at its upcoming meeting on November 13.
The pair fell to a one-week low level of 0.6361, albeit showed some resilience at lower levels and quickly reversed the early lost ground amid growing optimism about a possible US-China trade deal later this month.
This coupled with a subdued US Dollar demand, weighed down by a modest pullback in the US Treasury bond yields, further collaborated to the pair’s attempted intraday bounce of around 25 pips from daily lows.
It, however, remains to be seen if the pair is able to capitalize on the recovery move or meets with some fresh supply at higher levels amid absent relevant market-moving US economic releases on Wednesday.
Meanwhile, a scheduled speech by the Chicago Fed President Charles Evans might influence the USD price dynamics and produce some short-term trading opportunities later during the early North-American session.
Technical levels to watch
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