• NZD/USD fell to a seven-month low on Wednesday after weak New Zealand employment data strengthened expectations for a rate cut by RBNZ this month.
• New Zealand’s unemployment rate climbed to 5.3% in the third quarter, the highest since 2016, as employment levels remained flat, data from Statistics New Zealand showed on Wednesday.
•Separate data showed a slight drop in the participation rate to 70.3% in Q3 from 70.5% in Q2, and wage inflation stayed modest, with the private-sector LCI excluding overtime up 0.5%, following a 0.6% rise in the previous quarter.
• The uptick in the jobless rate aligned with forecasts from a Reuters poll and the central bank, though employment growth fell short of the 0.1% gain predicted in the poll.
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• Persistent softness in New Zealand’s labour market and subdued wage growth are likely to strengthen the case for a cash rate cut at the central bank’s meeting later in November.
• Immediate resistance is located at 0.5706(Nov 6th high), any close above will push the pair towards 0.5728(50%fib).
• Support is seen at 0.5633(38.2%fib) and break below could take the pair towards 0.5518 (23.6%fib).
Recommendation: Good to sell around 0.5670, with stop loss of 0.5750 and target price of 0.5600
