Forex Market: NZD/USD trading forecast for November 9th

Friday’s trade saw NZD/USD within the range of 0.6495-0.6632. The pair closed at 0.6524, falling 1.35% on a daily basis, or at the most considerable rate since September 10th, when it plummeted 1.66%. The daily low has been the lowest level since October 6th, when the cross registered a low of 0.6476. In weekly terms, NZD/USD lost 3.73%, or the most since the week ended on January 25th, when the pair recorded a 4.32% slump.

US dollar gained ground sharply against its major peers on Friday, after the Bureau of Labor Statistics said US employers in all sectors of the economy with the exception of the farming industry added 271 000 jobs in October, a figure far beyond what analysts had projected. It has been the most considerable gain in jobs since December 2014, when 329 000 job positions were added. Septembers figure has been revised down to 137 000 from a job gain of 142 000 reported previously. At the same time, the rate of unemployment fell 0.1% to reach 5.0% in October, or the lowest level since April 2008. The strong employment numbers may bolster the view that the Federal Reserve Bank will take action and hike borrowing costs at its final meeting for the year on December 15th-16th.

On Monday (November 9th) NZD/USD trading may be influenced by the macroeconomic reports listed below.

Fundamentals

United States

Federal Reserves Labor Market Conditions Index

At 15:00 GMT on Monday the Federal Reserve Bank is to report on its Labor Market Conditions Index regarding October. In September the gauge slipped to a zero value from 2.1 in the prior month. This index is derived from 19 labor market indicators, as the unemployment rate and the private payrolls are considered to be of the greatest importance. The gauge also encompasses the labor-force participation rate, as well as indicators concerning wages, hiring and dismissals. A reading above the key 0.0 level suggests labor market activity is improving, while a value below it is a signal for worsening conditions. Therefore, readings above 0.0 are usually dollar positive.

Correlation with other Majors

Taking into account the week ended on November 8th and the daily closing levels of the currency pairs involved, we come to the following conclusions in regard to the strength of relationship:

NZD/USD to EUR/USD (0.9763, or very strong)
NZD/USD to GBP/USD (0.7898, or strong)
NZD/USD to AUD/USD (0.6844, or strong)
NZD/USD to USD/CAD (-0.8372, or very strong)
NZD/USD to USD/CHF (-0.9095, or very strong)
NZD/USD to USD/JPY (-0.9196, or very strong)

1. During the examined period NZD/USD moved strongly in one and the same direction with AUD/USD and GBP/USD.

2. NZD/USD moved almost equally in one and the same direction with EUR/USD during the week.

3. NZD/USD moved almost equally in the opposite direction compared to USD/CAD, USD/CHF and USD/JPY. This relationship has been the most pronounced between NZD/USD and USD/JPY.

Daily and Weekly Pivot Levels

By employing the traditional calculation method, the Monday pivot levels for NZD/USD are presented as follows:

Central Pivot Point – 0.6550
R1 – 0.6606
R2 – 0.6687
R3 – 0.6743

S1 – 0.6469
S2 – 0.6413
S3 – 0.6332

By using the traditional method of calculation again, the weekly pivot levels for NZD/USD are presented as follows:

Central Pivot Point – 0.6604
R1 – 0.6712
R2 – 0.6901
R3 – 0.7009

S1 – 0.6415
S2 – 0.6307
S3 – 0.6118