The kiwi dollar depreciated more than 2.0% against the greenback during April, retraced to sub 0.66 levels not seen since November 2018. Among NZD crosses, EURNZD and GBPNZD outperformed last month with 2.40% each, followed by AUDNZD with 1.70%. Besides NZDUSD remain under pressure.

This morning Stats NZ released March labor market statistics. The kiwi dollar fell 0.45% against most-traded currencies. Unemployment rate edges down to 4.2% was the lowest in a decade, according to the official data.

Summary:

March Unemployment rate down but employment drops.

The seasonally adjusted unemployment rate was 4.2 percent in the March 2019 quarter, down from 4.3 percent in the December 2018 quarter, Stats NZ said today.

  • Unemployment rate down to 4.2 percent.
    The unemployment rate fell to 4.2 percent in the March quarter down from 4.3 percent in the December 2018 quarter Stats NZ said today.
  • Employment rate drops to 66.7 percent:
    The employment rate fell to 67.5 percent in the March 2018 quarter, down from 67.8 percent in the December 2018 quarter.
  • Labor cost index:
    The labor cost index increased by 2.0 percent in March 2019.

Commenting on the data labor market and household statistics senior manager Jason Attewell said: “The unemployment rate has been mostly trending down since the global financial crisis in 2008”.

Attewell also said “Generally, employment growth tends to lag broader economic growth by about three months. New Zealand has seen a softening of economic growth as measured by gross domestic product over the last six months, and we now are seeing that softening come through the employment rate.”

Upcoming events:
Wed, May 08: OCR announcement and Monetary Policy Statement media conference and Financial Stability Report will release on 29th May.

TECHNICAL VIEW

The kiwi dollar fell 0.45% against most-traded currencies, and the cross NZDUSD rejected at 14MA coincides with the six-week descending trendline this morning.
The daily RSI has picked up, and the oscillator has been turned back to bullish crossover.
Ahead of today’s FOMC meeting, we remain cautious on the near-term. We keep an eye on the today’s high 0.6685, as a break out these levels would strengthen the upward momentum with a new target the resistance levels around 0.6720-0.6740.

Further US dollar could extend even extend the rally towards 0.6780 its 50MA.
Supports are located at 0.6630, 0.6580 and 0.6540.

Forecast: From the current levels the downside risk is limited to 0.6580-0.6540

It is important to always keep in mind the risks involved in trading with leveraged instruments.

Have a question? Let us help!

A KTM Analyst is ready to assist you, click on the comment section below