NZD/USD gains the 100-day SMA amid soft Dollar

• The NZD/USD jumped to 0.6235 and now trades above the 20,100, and 200-day SMAs.
• US Jobless Claims for the first week of June came in above expectations.
• New Zealand confirmed it entered into a technical recession.

In Thursday’s session, the Kiwi gained further traction to jump above the 100-day SMA as the US Dollar weakened post Jobless Claims and Retail Sales. In that sense, US bond yields are falling while US stocks are rising reflecting a positive market environment and applying further pressure on the USD. On the other hand, the NZD managed to clear losses after weak Gross Domestic Product (GDP) data from New Zealand.

Investors asses Fed decision after Jobless Claims data

The recent data from the US Census Bureau revealed that Retail Sales from May (MoM) experienced a growth of 0.3% compared to the previous reading vs the 0.1% decline expected. On the other hand, Jobless Claims for the week ending June 9 increased slightly to 262K, surpassing the predicted number of 249k but remaining at the same level as the previous week.

Despite the hawkish tone of Wednesday’s monetary policy statement from the Fed, US bond yields declined following the data as a weak labor market may reduce the pressure from Fed officials to continue to hike rates. Its worth noticing that Chair Powell stated that the labour market remains robust and that is the main engine of the US economy. That being said, the 2,5 and 10-year yields all saw declines, with the latter falling sharply to 3.72%, seeing a 1.60% contraction, and making the USD lose interest.

On the other hand, the NZD managed to shrug off weak-GDP-related losses. The report showed that the economy contracted by 0.1% QoQ in Q1, and as two consecutive contractions in quarterly figures is considered to be a technical recession.

NZD/USD Levels to watch

According to the daily chart, the bulls clearly have the upperhand 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 rising green bars suggesting a strong bullish momentum.

In case the pair continues to move upwards, resistance levels can be found at around 0.6250, followed by the 0.6280 area and the psychological mark at 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