NZD/USD bulls move up against possible bearish commitments
- NZD/USD ended Friday strong due to a risk-on market following NFP.
- Technically, there is a compelling case for a daily correction.
The NZD was nid at the end of the week as the greenback fell in the wake of the dismal jobs report.
Nonfarm Payrolls only climbed 266k in April versus market expectations for over one million.
Also, the unemployment crept up to 6.1% vs 6.0% and average earnings rose 0.7% MoM but the annual rise fell to 0.3% YoY (4.2% YoY), again owing to base effects.
However, as analysts at ANZ Bank explained, the report ''wasn’t all bad''.
''There was progress in some of the social elements to which the Fed is playing close attention. The data nonetheless push back against overheating arguments for now and underpin the Fed’s patient guidance, supporting risk.''
Higher beta FX was boosted owing to risk-on markets whereby investors were taking the view that the Fed will be lower for longer.
''With inflation expectations still rising that may give pricing power back to companies, further fuelling equities and commodity prices, and by association, the NZD,'' the analysts at ANZ Bank explained.
''Global risk markets certainly feel very glass-half-full at the moment, and if that continues, the NZD is likely to be a beneficiary. Local drivers of NZD remain absent.
NZD/USD techcnial analysis
Meanwhile, there is scope for a daily correction as follows: