We mentioned in yesterday’s note to watch out for New Zealand unemployment overnight and it came in lower than expected hitting a five year low of, 5.6% as opposed to 5.8%, however employment was actually lower than expected giving a mixed picture which has sent the Kiwi dollar lower.
Ever since NZDUSD retreated from its all-time high around the 0.8835 level back in July it’s been in free fall and is now just above support seen around 0.8400. Now that we are near the end of the RBNZ’s tightening cycle the Kiwi could find it hard to sustain its current levels, in particular against the Aussie where it’s tentatively trading on a support level (for NZDAUD).
Already this morning we’ve seen some euro weakness following lower than expected German factory order data. EURUSD went as far as 1.3350 a new eight month low, but has since recovered to 1.3360 at the time of writing. Near term support is seen at 1.3335 and then 1.3315 if we do indeed break below that 1.3350 level whilst to the upside the 1.3400 is the nearest resistance hurdle. There’s unlikely to be any major upside momentum for the euro ahead of tomorrow ECB meeting which is now the focus for euro traders.
Also this morning we see UK industrial and manufacturing production which is due to recover from a shock fall last month. GBPUSD has held its ground for now trading at 1.6860 so anything better than expectations could see the recent little bounce continue.