The New Zealand dollar rose as the jobs report in the United States was a massive miss on Friday.
NZD/USD
The New Zealand dollar rallied a bit during the trading session on Friday as the jobs report in the United States was a huge miss, with the United States producing a negative number of jobs last month, not what we had anticipated. In fact, the swing was about 100,000 less than expected, but we have seen the New Zealand dollar consolidating to begin with, and by the end of the day, we find ourselves still within the same range we have been in for the last 4 or 5 sessions. The technical setup looks like a bullish flag or maybe even a bullish pennant, depending on how you look at things, but either way, this is a market that, if it can break out to the upside, the measured move would be for an attack on the 0.5950 level, possibly even 0.60.
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Risk Appetite and Middle East Headline Risks
Ultimately, the New Zealand dollar is a currency that does better with risk appetite increasing, so it is likely to continue to watch a lot of noise out there, and of course, the headlines coming out of the Middle East. That, of course, has a major influence on risk appetite, as the market tries to get a grip on the idea that global supply chains may be disrupted, and most importantly, energy supply chains.
Countries like New Zealand are extraordinarily sensitive to energy coming out of the Middle East, and of course, the US dollar is considered to be a safe currency, and this could see a reversal if things flare up in the Middle East pretty quickly. So, while technically speaking it looks pretty positive, recent history has shown us that it doesn't take much to get the market flying in the opposite direction based on fear. This is a weekend that we are going into that, quite frankly, may or may not cause headlines, and therein lies the problem.
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