New Zealand Dollar Gains as Unemployment Rate Rises 6/11/19

New Zealand Dollar Gains as Unemployment Rate Rises 6/11/19

The Kiwi rose after Statistics New Zealand released the employment numbers for the September quarter. In the quarter, the seasonally adjusted unemployment rate rose slightly to 4.2% from the previous 3.9%. This rise in the unemployment rate came after a drop to an 11-year low in the second quarter. The seasonally adjusted underutilisation rate declined to 10.4%, which was the lowest level since the second quarter of 2008. The employment rate remained steady at 65.7% as more than 6000 became employed in the quarter. The tight labour market has led to higher wages. The labour cost index, including overtime, increased 2.4% in the quarter.

AUD/NZD Technical Analysis

The AUD/USD pair has been on an upward trend since Monday, when the pair was trading at 1.0707. The pair reached a high of 1.0820 yesterday. This level is along an important support as shown below. The price is below the 14-day and 28-day moving averages while RSI has remained below the overbought level of 70. The On Balance Volume has been on an upward trend too. The pair may move lower following New Zealand employment data.

Gold falls on trade optimism

Wall Street gained yesterday after reports showed that US and China were nearing a trade deal. Reports from major news organisations said that the US and China had reached a partial agreement. The agreement will see the removal of some tariffs. It will also ensure that China increases its purchases of American goods like soybeans and pork. Also, China will agree to some form of intellectual property protection for US companies. Still, there are worries that the deal will not go far enough. There are also concerns that China may back-off as Trump goes through impeachment. Later today, the market will receive corporate earnings from companies like Square and Qualcomm. Meanwhile, gold price declined on this optimism.

Gold Technical Analysis

XAU/USD declined sharply yesterday as markets became more optimistic about trade. This week, the XAU/USD pair has declined from a high of 1515.90 to a low of 1480. On the hourly chart, the price is below the 14-day and 28-day moving averages. The signal line of MACD has started moving upwards while On Balance Volume has continued to decline. The pair may make some more gains to test the important resistance level of 1500.

Europe service PMI data in focus

The market will focus on PMI data from Europe. In Germany, the market expects service PMI for September to decline slightly from 51.4 to 51.2. The consensus estimate is that the composite PMI will increase from 48.5 to 48.6. In Germany, the market will also receive factory order numbers for September. In the European Union, analysts expect the services and composite PMI to increase from 51.6 to 51.8 and 50.1 to 50.2 respectively. These numbers come at a time when some market participants hope that the EU economy has bottomed.

EUR/USD technical analysis

The EUR/USD pair formed a double top pattern at 1.1175. It then declined sharply yesterday and reached a low of 1.1062. On the hourly chart, this price is below the 14-day and 28-day moving averages. The RSI has emerged from the oversold level of 14 to above 35. There is a possibility that the pair will rise to the important resistance level of 1.1100.

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