- US labor productivity data did little to affect dollar sentiment or pull NZD / USD out of its range below 0.7050.
- The NZD is likely to continue trading as a function of global sentiment ahead of the manufacturing sales volume data at 9:45 PM GMT.
The NZD / USD It continues to trade within the rough 0.7025-0.7055 range that has been in play since the start of trading in Asia on Tuesday, in line with a dovish feeling from broader forex trading. Currently, the pair is trading slightly higher for just under 10 pips from around 0.1%.
NZD / USD focused on macro issues
The NZD / USD trades based on USD flows so far this Tuesday, rising as high as 0.7050 during the Asian session and falling as low as 0.7020 in the late European morning session, before recovering towards 0.7050 more recently. This ripple has occurred almost perfectly in line with the dollar index (DXY) which oscillates between 90.70 and 91.00.
The USD was little affected by US nonfarm labor productivity growth in the third quarter, which disappointed with quarterly growth of just 4.6% (expectations were 4.9% growth) and unit labor costs , which fell 6.6% during the third quarter versus expectations for a drop of 8.9%.
Amid the lack of fundamental new developments related to New Zealand so far this week (things have been quiet on the political and RBNZ fronts and no major data has yet been released this week), the NZD has traded extensively. in line with a broader risk appetite.
However, manufacturing sales volume data for the third quarter, which will show how well the country’s manufacturing sector recovered from the 12.2% drop in second quarter sales volumes as a result of global lockdowns due to Covid-19 outbreak, they will probably get attention. But given that manufacturing only accounts for 12.2% of the New Zealand economy (according to the New Zealand Treasury), extrapolation of the performance of the economy is likely to be somewhat limited, making the volatility of the NZD unlikely. be particularly large.
NZD / USD in short-term downtrend, but still supported above 0.7000
Since retreating from the 0.7100 level, NZD / USD has formed a downtrend channel, but it has largely remained supported above the 0.7000 psychological level. If risk appetite worsens and causes a breakout to the south of this important 0.7000 level, it could open the door for a move south and a test of the 21-day moving average at 0.6959. If the current downtrend breaks down, a move back towards Monday’s highs at 0.7065 and then towards 0.7100 would be in the cards.
4 hour chart
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