NZD/USD reverses NZ jobs-led spike to 0.6970

The NZD/USD pair is on a retreat from fresh six-day tops reached at 0.6968, in a knee-jerk reaction to a stellar New Zealand’s jobs report released earlier today.

The spot trims gains and drops back below the mid-point of 0.69 handle, as the USD bulls fight for control amid renewed demand for the buck on profit-taking, as we head towards the FOMC monetary policy decision due later at 1800 GMT today.

Moreover, a renewed risk-aversion wave gripped the Asian equity markets and weighed negatively on the higher-yielding currency NZD. The Asian indices turned negative and are down -0.33% to -0.90%.

However, the corrective slide remains capped as investors continue to cheer strong NZ jobs report, with employment growth remaining strong in Q1, with the HLFS measure rising 1.2% q/q (5.7% y/y), against consensus expectations of a 0.8% q/q lift. 

Additionally, overnight recovery in oil prices also keep the sentiment underpinned behind the resource-linked Kiwi.

Next of note for the major remains the US dataflow, which includes the ISM services and ADP jobs, due to be reported ahead of the FOMC decision.

NZD/USD Levels to consider                                                                              

To the upside, the next resistance is located at 0.6968/71 (daily high/ classic R2), above which it could extend gains to 0.7000 (psychological levels) and from there to 0.7082 (100-DMA). To the downside immediate support might be located at 0.6898 (previous lows), and from there to 0.6850/45 (multi-month lows), below 0.6800 (key support) would be tested.