Did New Zealand’s Employment Numbers Change The Trend?
Last night the New Zealand employment report was published and it was impressive. Employment grew by 1.2% as opposed to the 0.8% expected, while unemployment fell by 3 points to 4.9% when expectations were for a decline of just 1 point.
This was more than the market asked for and NZD pairs surged, with NZD/USD jumping around 40 pips higher after the release.
Down we´re heading again
Last week, this forex pair traded in a 200 pip downtrend together with AUD/SUD. But this week the price has retraced about half of the declines with help from the NZ employment numbers last night.
To me, this is not a change in the near term trend; last night´s numbers were pretty good but the spike was due to thin liquidity, as is the case with the economic data coming from Asia.
We also saw a clear example of how price action shows which side the stream is flowing. After the initial spike, this forex pair lost half its gains and now the price is lower than where it was before the employment report was released. This shows that the buyers are not confident enough to hold longs for too long in this pair, even after such great numbers.
So, judging by price action, I don´t think the near term trend has changed and that´s related to the commodity currencies which have been suffering lately. Therefore, I´m preparing to open a sell forex signal here as well as in AUD/USD after a retrace higher, if they can manage that. Moving averages come in handy when it comes to picking entry points, so have a look at them on your H1 forex charts, especially in the AUD/USD chart.
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