NZD/USD: rallies nicely on jobs, extending the overnight gains, targets set on 0.70 handle

NZD/USD has traded better bid on the back of US dollar weakness overnight, while in early Asia, the bulls have the lead due to domestic data from NZ.

NZ printed the Unemployment rate that came in well below the expected 5.1% at 4.9% as well as the employment change that beat expectations. At 70.6%, the participation rate increased as well, further adding bullishness to the jobs sector and making the unemployment rate that bit more compelling for Kiwi bulls. This arrived 1.2% q/q vrs the expected 0.8%. This lead the kiwi to rally 30 pips on the release while some follow through might occur in Tokyo with yields in the US 10 year below the 2.3% psychological level and the DY trading below the 99 handle. 

FOMC meeting: no game changer for the USD - Valeria Bednarik, FXStreet

Key US data previews: FOMC and ADP employment report - Nomura

Meanwhile, the markets might not wish to get too far ahead of themselves ahead of the key data that we will get from the US session for today. Not only do we have the FOMC, but perhaps even more meaningful could be the ADP report as a prelude to this week's showdown. Given the Fed is not expected to hike until June, the nonfarm payrolls on Friday could be the biggest price-mover this week.

NZD/USD levels

0.6920 was taken out overnight and next on the cards is the 0.70 handle, ahead of the 17th April highs of 0.7035. 0.7060/70 come thereafter as a key resistance area through the 200-d ema (0.7055). There is a double bottom at 0.7130 as the mid-Feb lows.  To the downside, NZD/USD has the 0.6850 range low as a key support below the 0.69 handle. Next key support below 0.6700 is down to 0.6675 as the 29th May 2016 high.