NZD/USD quickly erases gains, 0.69 back in sight

After jumping to 0.6950 area to refresh its daily high following the initial USD sell-off, the NZD/USD quickly gave away its earnings as DXY returned to 101.70 region.

The US Labor Department has informed on Friday that the US economy has created 235K jobs during February, vs. 190K expected and January's 238K (revised from 227K). The US jobless rate fell to 4.7% in the same period, and Average Hourly Earnings rose 0.2% MoM.

March hike

 The CME Group FedWatch Tool shows that the March hike probability is at 93% at the moment.

James Knightley, a senior global economist at ING, suggested that ahead of this release financial markets were fully pricing in a 25bp rate hike from the Federal Reserve next week. Today’s data will only cement those expectations. As for the rest of the year, financial markets are pricing in just shy of two more 25bp hikes with the Fed’s dot forecasts suggesting FOMC members fully expect two more.

Technicals

At the moment, the NZD/USD is still up 0.3% at 0.6920. Technical supports for the pair are aligned at 0.6860 (Dec. 23 low), 0.6808 (Jun. 3 2016 low) and finally 0.6690 (May 29, 2016, low). On the upside, the first resistance could be found at 0.7000 (psychological level), followed by 0.7010 (10-DMA), and 0.7160 (200-DMA).