The New Zealand Employment Change indicator is an important leading indicator which often has a significant impact on the markets. Traders and analysts carefully examine employment figures, looking for any trends which could affect NZD/USD. A reading which is better than the market forecast is bullish for the New Zealand dollar.
Here are the details and 5 possible outcomes for NZD/USD.
Published on Wednesday at 21:45 GMT.
Indicator Background
Job creation is one of the most important leading indicators of overall economic activity. The release of the employment change indicator, together with the unemployment rate, is highly anticipated by the markets.
The employment change indicator is released every quarter, which tends to make it a market-mover. The previous reading came in at a disappointing 0.2% increase, well below the market forecast of 0.5%. The markets are expecting an improvement, with a February forecast of 0.4%. Will the indicator be able to meet or beat the market’s prediction?
Sentiment and Levels
Like many other currencies, the New Zealand dollar has rallied sharply against its US counterpart. However, US employment figures are strong, and could help the dollar rebound from its recent losses. So, the overall sentiment is neutral on NZD/USD towards this release.
Technical levels from top to bottom: 0.8620, 0.8573, 0.8505, 0.84, 0.8340, 0.8240 and 0.8165.
5 Scenarios
- Within expectations: 0.1% to 0.7%: In this scenario, NZD/USD could show some slight fluctuation, but it is likely to remain within range, without breaking any levels.
- Above expectations: 0.8% to 1.1%: A reading above expectations would be an indication of expansion in the economy, and could push the pair above one resistance level.
- Well above expectations: Above 1.1%: A sharp rise in employment numbers could propel NZD/USD upwards, and two or more resistance lines can be broken.
- Below expectations: -0.3% to 0%: A lower than expected reading could pull the pair downwards, with one support level at risk.
- Well below expectations: Below -0.3%: A very poor reading will hurt confidence in the kiwi, and NZD/USD could break two or more support levels.
For more on the kiwi, see the NZD/USD.