NZD/USD: 0.7200 to cap, eyes back on cloud base?

Currently, NZD/USD is trading at 0.7175, down 0.00% on the day, having posted a daily high at 0.7185 and low at 0.7173.

NZD/USD is steady in the release of the recent data from New Zealand. New Zealand terms of trade index for Q2 arrived +1.5% q/q vs the expected +3.0%. NZD/USD picked up 50 pips in a minor recovery albeit was closing the US session below the closing price yesterday and has since moved into a consolidation phase ahead of tonight nonfarm payrolls. 

Analysts at Westpac explained that August non-farm payrolls are anticipated to rise 180k. "Westpac expects a 170k increase due to survey employment indexes falling back, but the ADP employment gain of 237k (185k exp.) adds upside risk to the forecast. With this, the unemployment rate is expected at 4.3%, while Westpac views stronger participation seeing unemployment tick up to 4.4%," the analysts argued.

Forex today: dollar wobbles in month end flows and damp PCE

First up, however, we have data from China, with the Aug Caixin manufacturing. This data comes after the release of yesterday’s official measure which showed a slight move up to 51.7 from a previous 51.4. The data usually has a marginal impact on its neighboring countries and trade partners such as Australia, particularly, and the NZ. 

NZD/USD levels

"NZD/USD is likely to remain capped by 0.7200 unless the USD weakens further," argued the analysts at Westpac. To the downside, the daily cloud base is located at 0.7139 and 0.7127 is the June 6 low and 0.7100.  to the upside, 0.7200/30 guards 0.7280/00 as the next key and initial resistance area ahead of the 0.7337 recent highs and 0.7370 (9th Aug high).