• NZD/USD eased on Wednesday after weaker-than-expected second-quarter labour market data cast doubt on the Reserve Bank of New Zealand's recent hawkish stance.
• New Zealand's unemployment rate rose to 5.6% in the second quarter from an upwardly revised 5.4%, according to Statistics New Zealand data released on Wednesday, signalling increased labour market slack that could limit further interest rate hikes this year.
• Statistics New Zealand data released on Wednesday showed the unemployment rate rose to 5.6% from an upwardly revised 5.4% in the previous quarter, signalling a softer labour market that could reduce the need for further interest rate hikes this year..
• The data prompted markets to slightly reduce expectations for a Reserve Bank of New Zealand rate hike next month, with the implied probability easing to 85% from 90%, though expectations for a move remain strong.
• The Reserve Bank of New Zealand lifted its official cash rate a quarter point to 2.5% in July as it sought to quell inflationary pressures in part driven by higher global oil prices.
• Immediate resistance is located at 05859(50%fib), any close above will push the pair towards 0.5895(Higher BB).
• Support is seen at 0.5775(61.8%fib)and break below could take the pair towards 0.5751(Lower BB).
Recommendation: Good to sell around 0.5910 with stop loss of 0.5980 and target price of 0.5850
