NZD/USD loses ground after US data

• The NZD/USD pair reached a daily high of 0.6015 and then plunged to 0.5940.
• US NFPs for August showed a mixed picture, while manufacturing PMIs for the same month were better than expected.
• The Dollar remains firm despite investors betting on lower chances of a final rate hike by the Fed in this cycle.

At the end of the week, the USD as measured by the DXY Index posts daily gains after the volatility seen in the markets following the release of the August Non-Farm Payrolls and the ISM manufacturing PMI figures. Still, the pair NZD/USD will record a weekly rise of 0.70%. No relevant data was published on the Kiwi side.

US August Nonfarm Payrolls beat expectations at 187,000, versus 170,000 expected and 157,000 revised downward. In terms of median hourly earnings, wages rose 0.2% (mom), below the 0.3% expected, and the unemployment rate rose unexpectedly to 3.8%. Other data showed that the Institute for Supply Management (ISM) reported higher-than-expected PMIs, with the manufacturing index at 47.6, above the 47 expected. The Employment index also stood at 48.5, but remains in contraction territory.

The dollar experienced volatility against its rivals as the mixed NFP report initially fueled a sell-off, but following the ISM PMI, the dollar rallied somewhat. US Treasury yields followed suit, suggesting that markets are betting on a less aggressive Fed and investors expect the tightening cycle to come to an end, as the labor market hinted at some weakness. Attention is now focused on September 13, the date on which the US will publish the figures of the Consumer Price Index (CPI) for August, which will be necessary for the expectations of the next decision of the Fed.

NZD/USD Levels to Watch

Daily chart analysis indicates a neutral to bearish outlook for NZD/USD as bears show signs of taking over but still face challenges ahead. The Relative Strength Index (RSI), which is in negative territory, suggests a possible equilibrium in the market with balanced buying and selling pressure. At the same time, the moving average convergence (MACD) shows stagnant green bars. Elsewhere, the pair is below the 20,100 and 200-day SMAs, which suggests bears are firmly in control of the big picture.

Support levels: 0.5930, 0.5900, 0.5880.

Resistance levels: 0.5967 (20-day SMA), 0.5980, 0.6000.

NZD/USD Daily Chart