NZD/USD breaks above 100-day SMA amid USD weakness

• The NZD/USD pair jumped to 0.6235 and is now trading above the 20,100 and 200-day SMAs.
• US jobless claims for the first week of June exceeded expectations.
• New Zealand confirmed that it has entered a technical recession.

In the Thursday session, the Kiwi gained ground again and settled above the 100-day SMA, as the US dollar weakened on the back of jobless claims and retail sales. In that sense, US bond yields are falling while US equities are rising, reflecting a positive market environment and putting more pressure on the USD. On the other hand, the New Zealand dollar managed to erase losses after the weak data of the Gross Domestic Product (GDP) of New Zealand.

Investors weigh Fed decision after jobless claims data

Recent data from the US Census Bureau revealed that May retail sales (mom) saw 0.3% growth compared to the previous reading vs. a 0.1% decline expected. On the other hand, jobless claims for the week ending June 9 increased slightly to 262,000, exceeding the forecast figure of 249,000, but remaining at the same level as the previous week.

Despite the hawkish tone of the Fed’s policy statement on Wednesday, US bond yields fell following the data as weak labor markets could reduce pressure on Fed officials to further hike. the cups. It should be noted that Chairman Powell stated that the labor market remains strong and that it is the main engine of the US economy. That said, the 2.5 and 10 year yields fell, with the latter falling sharply to 3.72%, experiencing a contraction of 1.60%, and making the dollar lose interest.

Elsewhere, the New Zealand dollar managed to resist losses related to weak GDP. Reporting that the economy contracted 0.1% qoq in the first quarter, and as two consecutive contractions on a quarterly basis is considered a technical recession.

NZD/USD Levels to Watch

According to the daily chart, the bulls clearly have the upper hand in the short term. The Relative Strength Index (RSI) stands above its midline with a positive slope, while the Moving Average Convergence Divergence (MACD) prints bullish green bars suggesting strong bullish momentum.

Should the pair continue to rise, resistance levels are around 0.6250, followed by the 0.6280 zone and the key psychological level 0.6300. On the other hand, supports line up at the 100-day SMA at 0.6220 and below at the 20 and 200-day SMA at 0.6150 and 0.6111, respectively.

NZD/USD Daily Chart