The New Zealand labor market showed a rise in the unemployment rate in the fourth-quarter together with a much smaller-than-expected increase in average hourly earnings. This may impact consumer spending as the global economy gears up for the holiday shopping season this month. The NZDUSD remained in its bullish advance, can bulls push higher or will bears attempt to break the up-trend? Subscribe to the PaxForex Daily Fundamental Analysis and grow your balance trade-by-trade.
Yesterday saw mixed data on the US service sector which accounts for over 80% of the US economy and the final reading for the Composite PMI was revised lower and closer to the 50.0 level. The US Dollar was able to strengthen despite this and today’s session is thin on fresh data, but non-farm productivity and labor costs data will be released. How will the NZDUSD react following the release? Today’s fundamental analysis will take a look at the upside potential as well as downside risk in this currency pair.
Here is the key factor to keep in mind today for New Zealand Dollar trades:
- New Zealand Employment Data: The Unemployment Rate for the third-quarter was reported at 4.2%. Economists predicted an Unemployment Rate of 4.1%. Forex traders can compare this to the Unemployment Rate for the second-quarter which was reported at 3.9%. The Unemployment Change for the third-quarter increased by 0.2% quarterly and by 0.9% annualized. Economists predicted an increase of 0.2% quarterly and of 0.9% annualized. Forex traders can compare this to the Unemployment Change for the second-quarter which increased by 0.6% quarterly and by 1.4% annualized. The Participation Rate for the third-quarter was reported at 70.4%. Economists predicted a Participation Rate of 70.3% quarterly. Forex traders can compare this to the Participation Rate for the second-quarter which was reported at 70.3%. Private Wages ex Overtime for the third-quarter increased by 0.6% quarterly. Economists predicted an increase of 0.6% quarterly. Forex traders can compare this to Private Wages ex Overtime for the second-quarter which increased by 0.8% quarterly. Labor Cost Private Sector for the third-quarter increased by 0.6% quarterly. Economists predicted an increase of 0.6% quarterly. Forex traders can compare this to Labor Cost Private Sector for the second-quarter which increased by 0.8% quarterly. Average Hourly Earnings for the third-quarter increased by 0.6% quarterly. Economists predicted an increase of 1.0% quarterly. Forex traders can compare this to Labor Cost Private Sector for the second-quarter which increased by 1.1% quarterly.
Here is the key factor to keep in mind today for US Dollar trades:
- US Non-Farm Productivity and Unit Labor Costs: Preliminary US Non-Farm Productivity for the third-quarter is predicted to increase by 0.9% quarterly and Unit Labor Costs are predicted to increase by 2.2% quarterly. Forex traders can compare this to US Non-Farm Productivity for the second-quarter which increased by 2.3% quarterly and to Unit Labor Costs which decreased by 2.6% quarterly.
Should price action for the NZDUSD remain inside the or breakout above the 0.6365 to 0.6430 zone the following trade set-up is recommended:
- Timeframe: D1
- Recommendation: Long Position
- Entry Level: Long Position @ 0.6375
- Take Profit Zone: 0.6680 – 0.6725
- Stop Loss Level: 0.6330
Should price action for the NZDUSD breakdown below 0.6365 the following trade set-up is recommended:
- Timeframe: D1
- Recommendation: Short Position
- Entry Level: Short Position @ 0.6330
- Take Profit Zone: 0.6205 – 0.6240
- Stop Loss Level: 0.6365
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