The New Zealand dollar has taken centre stage in the last few hours as the unemployment figures were released causing the NZDUSD to crash back on a day which saw strong gains against a weakening USD. Unemployment rate figures missed the mark with a big jump to 5.2% (4.8% exp), which in turn sent the NZDUSD running back down the charts. While this is a negative, one of the strongest positive and the reason we saw such a large jump, was the participation rate which lifted to an all time high of 70.5% (70.2% exp). This is a double edged sword in that it’s great to see so many people looking for work in the economy, but at the same time it pushes important market metrics like the unemployment rate higher. For traders wondering if the Reserve Bank of New Zealand will accordingly look to push interest rates higher, it’s certainly possible. A more active labour force is likely to stimulate the economy and help push inflation further, which will of course cause the RBNZ to look to raise interest rates.
For the NZDUSD the technical’s continue to impress despite today’s fundamental shocker. Once again we find ourselves saying the trend is your friend for the NZDUSD as it has climbed the charts a rapid rate and continues to remain bullish despite the employment figures. Traders yesterday were rewarded with the market pushing through resistance at 0.7343, before it looked to push down lower on the back of negative news. The market has also reopened with a negative outlook and there is bearish pressure on the NZDUSD, so the focus will now switch to support at 0.7283 which is likely to find itself holding back any further bearish movements. Below this level and I would also be focused on the 20 day moving average which is looking to climb back into the spotlight after being left behind.
With Trump in power it’s easy to lose sight of commodities and in this case Oil has been one that has been missing some of the limelight. Recent surveying down by Reuters has shown that OPEC countries have cut 82% of agreed production, which in turn has shown positive movements for the price action in the oil market.
Oil traders have always been strong technical followers and the recent swings low have shown how strong those technical’s can be. The 50 day moving average continues to be dynamic support for the oil market, with trades pushing lower encountering stiff support and a push higher after touching that area. With that in mind it looks likely we will see oil push upwards to resistance at some point in the near future, and it will be interesting to see if the resistance level at 54.46 can slow down momentum in the market place. I do feel however, that oil markets are waiting to see what Trump does in this market and we should too, but for now there are opportunities abound.
By Alex Gurr, Guest Analyst at ForexTime