NZD/USD Rate Recovering from Its Low of the Year amid News from Labour Market

Yesterday’s news showed that New Zealand’s labour market is stronger and more resilient than expected.

In the fourth quarter of 2023, employment grew by 0.4% in the fourth quarter (forecast = +0.3%, quarter earlier = -0.1%). The unemployment rate is 4%, forecast = 4.3%.

A strong labour market indicates a margin of safety in the economy. And that may suggest that the Reserve Bank of New Zealand’s tight monetary policy to quell inflation may continue longer.

The news helped the NZD strengthen against other currencies. Moreover, an interesting situation develops on the NZD/USD chart:

→ based on the results of yesterday, the price recovered and strengthened above the low C, which today is the minimum of 2024.

→ Moreover, level C is in the region of 50% of the rollback from the impulse movement A→B.

→ At the same time, the chart shows signs of a failed bearish breakout of the level of 0.6050, which previously served as resistance.

Considering the above arguments, there is reason to believe that the bulls may try to resume the uptrend (shown by the blue channel) after the price of NZD/USD has fallen below its border (for now – not for long). The trigger for a new surge in volatility could be news about the state of the labour market in the US, data is expected today at 16:30 GMT+3.

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