NZD/USD dribbles above 0.6600 after NZ Q4 jobs data, unemployment insurance scheme

• NZD/USD eases from weekly high, probes two-day rebound after New Zealand jobs report.
• NZ Employment Change, Unemployment Rate eased in Q4, Participation Rate softened too.
• NZ Government unveils an unemployment insurance scheme worth $3.54 billion.
• Kiwi bulls tracked Aussie higher post-RBA while softer USD added to the upside momentum, market’s mood stays unclear.

NZD/USD bulls take a breather following the mixed prints of Q4 employment details from New Zealand during early Wednesday morning in Asia. In doing so, the kiwi pair consolidates the recent gains around the weekly top, easing to 0.6635 by the press time. However, the government’s recent assurance to those who lost their jobs during the pandemic times seems to have kept the bulls hopeful of late.

As per the latest New Zealand (NZ) jobs report for the fourth quarter (Q4) of 2021, the Unemployment Rate continues to ease but the softer-than-expected figures of Employment Change, Labour Cost Index and Participation Rate seem to have tested NZD/USD bulls. “We’re “strongest” in the market, expecting unemployment to fall to a historic low of 3.0%. If we’re right, we’d expect the NZD to benefit,” said ANZ bank ahead of the data.

Read: NZ Unemployment Rate beats, but disappointments elsewhere hamsting NZD

A few minutes before the NZ employment data, New Zealand Finance Minister Grant Robertson released employment benefits worth around $3.54 billion, including $1.81b for displacement and $1.73 billion for health condition and disability claims, per NZ Herald. The news reads, “People who are laid off may soon be able to claim support worth as much as 80 percent of their former income, under a Government unemployment insurance plan unveiled today.”

That said, the Kiwi pair tracked the Australia Dollar towards the north the previous day while being on the top-tier of the G10 currency pair winners. The AUD cheered the Reserve Bank of Australia’s (RBA) end to the Quantitative Easing (QE) and revised up the inflation forecasts. Though, the Aussie central bank’s rejection of the immediate rate hike concerns and comments like, “Inflation has picked up, it is too early to conclude that it is sustainably within the target band,” initially weighed on the AUD/USD.

It should be noted that a generally positive risk appetite, upbeat US equities and downbeat US Dollar, despite firmer US Treasury yields, added to the NZD/USD strength earlier.

Moving on, markets remain on the sidelined while waiting for the key data/events, starting from today’s Eurozone Consumer Price Index (CPI) and ending on Friday’s US NFP. However, mixed concerns over Russia-Ukraine may offer intermediate moves. It should be noted that the Fedspeak will be important as well.

Technical analysis

Although oversold RSI conditions triggered NZD/USD bounce during the early week, a three-week-old descending trend line joins the 10-DMA, around 0.6650, to challenge the pair’s immediate upside. Following that, the December 2021 low near 0.6700 will be in focus.

Alternatively, the recently flashed multi-month low near 0.6530 will lure the NZD/USD bears once they conquer the 0.6600 round figure.