NZD/USD: testing below key 0.72 the figure on strong USD and US datae

Currently, NZD/USD is trading at 0.7196, down -0.83% on the day, having posted a daily high at 0.7280 and low at 0.7193.

NZD/USD's minor recovery from below the 0.72 handle this week has been reversed almost 100% with a resurgence from the greenback across the board. The DXY is now up+0.63% while the US ten year yields are up 0.57%. 

Atlanta Fed: GDPNow model forecast for real GDP growth in Q3 is 3.4%

Data from the US has been supportive ahead of this week's showdown in the nonfarm payrolls. Firstly, the ADP report was a solid figure and pointing to a "Goldilocks" outcome in the nonfarm payrolls while at the same time, the US economy is now seen expanding at an annualized 3.0% during the April-June period, bettering expectations for a 2.7% growth.

Inflation is the bigger concern for policymakers

However, "we are expecting weak wage growth on Friday, which won't help the Fed's case for higher rates," explained analysts at ING Bank. " We are still optimistic that both core inflation and wages will improve sufficiently to give the Fed confidence to hike again in December. But with the recovery in both metrics likely to be steady, it could be a while before markets come around to this way of thinking, the analysts added. 

NZD/USD levels

To the downside,0.7186, the June 15th low, along with the 50% of the move up from the 2017 low (May low) at 0.7187 is a key area of support ahead of 0.7150 June 5 high; The daily cloud base is located at 0.7139 and 0.7127 is the June 6 low and 0.7100. On the flip side, 0.7200/30 guards 0.7280/00 as the next key and initial resistance area ahead of the 0.7337 recent highs and 0.7370 (9th Aug high).