The NZD/USD pair reversed all of its impressive NZ jobs report-led gains to one-week high and has now retreated back below mid-0.6900s.
Today’s stellar quarterly employment report from New-Zealand, showing an unexpected jump in the number of employed people (1.2% q-o-q) and a larger-than-expected drop in the unemployment rate, provided an initial boost to the major.
The pair, however, lost its upside momentum amid a modest greenback buying interest, with the key US Dollar Index aiming to reclaim the 99.00 handle. Moreover, the prevalent cautious environment, ahead of the much-awaited FOMC decision, also prompted traders to take some profits off the table following the pair’s recent up-move of nearly 120-pips in just three trading sessions.
Ahead of the Fed announcement, investors will also confront the release of ADP report on US private sector employment and ISM non-manufacturing PMI, which should provide some impetus for short-term traders.
Technical levels to watch
A follow through retracement below the 0.6900 handle, the pair is likely to head slide towards 0.6870-60 horizontal support before eventually aiming back towards the 0.6800 handle. On the upside, momentum back above mid-0.6900s now seems to lift the pair beyond 0.6965-70 area (session top) towards reclaiming the key 0.70 psychological mark, also coinciding with 50-day SMA.