- NZD/USD is trading in a tight range on Friday.
- US Dollar Index consolidates weekly gains below 91.50
- Investors await January Nonfarm Payrolls report from US.
The NZD/USD pair lost nearly 50 pips on Thursday and extended its slide to a daily low of 0.7136 during the Asian trading hours on Friday. With the market action turning subdued ahead of key macroeconomic data releases from the US, the pair seems to have gone into a consolidation phase and was last seen posting small daily gains at 0.7160.
DXY rally loses steam
The unabated USD strength, as reflected by the sharp upsurge witnessed in the US Dollar Index (DXY), didn’t allow NZD/USD to take advantage of the risk-on market environment this week.
The DXY surged to its highest level in more than two months at 91.60 but lost its bullish momentum as investors seem to be staying on the sidelines while for the US Nonfarm Payrolls (NFP) report. As of writing, the DXY was down 0.1% at 91.43.
Previewing the data, “we expect a 200K increase that would just offset the 160K decline in December and largely because shutdowns are occurring in a month that normally sees a lot of seasonal unwind of holiday hiring,” said RBC Economics analysts and noted that the number of people receiving jobless benefits has increased since the December survey period.
The market consensus points to a 50K increase in NFP following December’s disappointing decline of 140,000. A stronger-than-expected reading could provide a boost to the greenback and cause NZD/USD to end the week on the back foot.
Technical levels to watch for
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