- NZD/USD holds on to recovery gains piled during last two consecutive days.
- The broad USD weakness, mainly on slowdown fears, helped the Kiwi to bounce off multi-year low.
- Fed’s Clarida’s speech and AU data in the spotlight for now, the US NFP and Fed Chair’s statements will be the key afterward.
Following its run-up to decorate the G10 winners’ list, NZD/USD remains modestly unchanged around 0.6300 at the start of the Asian session on the key Friday that offers the US employment report.
Neither domestic fundamentals nor trade sentiment, not to forget any good news from major customers like Australia and China, the Kiwi pair had nothing majorly positive that could pull it back from multi-year lows.
Even so, the US Dollar (USD) weakness was more than enough for the pair bulls to propel the quote. With the ISM Non-Manufacturing Purchasing Managers’ Index (PMI) joining the grades of earlier activity gauge, coupled with disappointing forward indicators, fears of the recession in the United States (US) haunt the greenback.
Additionally, trade jitters surrounding the US-China and the US-EU relations together with mixed signals from the Federal Reserve policymakers also contributed to the USD’s declines.
While the US jobs report for September, led by the Nonfarm Payrolls (NFP), and the Fed Chairman Jerome Powell’s speech will unarguably be the key driver of the day, a speech from the Federal Reserve Vice Chair Richard Clarida and housing/retail sales data from largest customer Australia could offer immediate direction to the Kiwi traders amid a lack of catalysts at the domestic calendar.
Markets fear a downbeat NFP based on recent signals from the sub-components of activity numbers while signals of how the US Federal Reserve System (Fed) will react to the economic challenges, if any, will be closely watched in the Fedspeak.
Technical Analysis
The pair currently struggles with the 10-week-old falling trend-line resistance, at 0.6312 now, a clear break of which will test the strength of a 21-day simple moving average (SMA) level of 0.6330 and multiple upside barriers around 0.6360/65. On the downside, 0.6270, 0.6250 and 0.6230 can be as nearby supports holding the gate for another south-run targeting a breach of 0.6200 mark.
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