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  • NZD/USD rises over 30 pips following the strong beat to the NZ Q4 jobs report.
  • New Zealand Unemployment Rate, Employment Change both came in better than downbeat forecasts and prior.
  • US dollar gains amid stimulus hopes, receding retail rush and sustained weakness in European data.
  • China’s Caixin Services PMI, risk catalysts will be important for fresh direction.

NZD/USD bulls are unstoppable while eyeing the 0.7200 following New Zealand’s (NZ) jobs report for the fourth quarter (Q4), published during the initial Asian session on Wednesday. The pair jumped notably after the headlines Unemployment Rate and Employment Change beat expectations and prior to the positive side. Late on Tuesday, New Zealand’s GDT Price Index details were also supportive to the bulls.

As per the latest updates, New Zealand’s Q4 Unemployment Rate dropped below the downbeat 5.6% forecast and 5.3% previous to 4.9%. Also favoring the buyers was a jump in the Employment Change from -0.8% to +0.6%, versus 0.0% expectations, during the stated period.

Read: New Zealand Q4 Unemployment Rate dropped below expectations of 5.6% to 4.9%, NZD/USD jumps 30 pips

On Tuesday, New Zealand’s GDT Price Index eased below 4.8% to 1.8%. However, closer details suggest that this was the consecutive sixth rise while the Whole Milk Power Price, a component of the GDT, rallied to the highest in four years.

Given the upbeat NZ releases, the Reserve Bank of New Zealand (RBNZ) can well keep its bullish bias, cheering the strong fight Jacinda Ardern gave to the coronavirus (COVID-19), which in turn suggests the NZD/USD has brighter spots to cheer.

Alternatively, US dollar gains, recently on hopes of stimulus and receding market frenzy, can challenge the kiwi bulls. However, the tough road to success for the Democratic $1.9 trillion aid package and the likely economic lag, on the virus and vaccine chatters, may weigh on the greenback.

Amid these plays, Wall Street remains strong with benchmark indices rising over 1.0% by the end of Tuesday’s trading. Further, the US 10-year treasury yields also grew 2.0 basis points (bps) to 1.2% by press time.

Although there are no major data from New Zealand left for publishing, China’s Caixin Services PMI, expected 51.1 versus 56.3 prior, can offer immediate direction to the NZD/USD traders. It should, however, be noted that the risk catalysts like US stimulus talks and virus/vaccine updates become the key to watch.

Technical analysis

Although 21-day SMA, currently around 0.7195, guards the quote’s immediate upside, NZD/USD buyers have often returned from an ascending trend line from December 21, at 0.7150 now, needless to mention the 50-day SMA level of 0.7136.