The NZD/USD pair fell sharply towards 0.5790 on Friday as the US dollar (USD) strengthened following a stronger-than-expected non-farm payrolls (NFP) report, while the New Zealand dollar (NZD) struggled to attract buyers amid cautious market sentiment. At the time of writing, the pair is trading at 0.5791, the lowest level in the last two months.
The Bureau of Labor Statistics reported that the United States (US) economy added 172,000 jobs in May. jobs, significantly above market expectations of 85,000. and after an upwardly revised enhance of 179 thousand in April.
Meanwhile, the unemployment rate held steady at 4.3% and annual wage growth fell to 3.4% from 3.6%. The data reinforced the view that the labor market remains resilient and put pressure on the Federal Reserve (Fed) to keep interest rates higher for longer or even raise them, supporting the dollar.
Next week, markets will closely watch the US Consumer Price Index (CPI) report and labor market data, while New Zealand will release the New Zealand Manufacturing Industry Productivity Index (PMI).
Short-term technical analysis:
On the 4-hour chart, NZD/USD is trading at 0.5793, deepening its downside bias as the price remains below both the 20-period straightforward moving average (SMA) at 0.5871 and the 100-period SMA at 0.5882. This setup reinforces a bearish tone in the tiny term, even as the Relative Strength Index (RSI) enters the oversold area near 23, suggesting that while sellers will remain in control, the decline may become more vulnerable to a corrective pullback.
Upside, initial resistance is at 0.5802, followed by a tighter limit at 0.5813 and then 0.5843, where earlier horizontal levels could attract renewed supply. Above these 20-period SMA at 0.5871 and 100-period SMA at 0.5882 form a broader resistance band that needs to be reclaimed to ease bearish pressure. On the other hand, immediate support appears at 0.5790; a decisive downward break would expose novel lows and keep the bears under control.
(The technical analysis for this story was written with the lend a hand of an AI tool.)
