FxWirePro: NZD/USD advances as weak U.S. payrolls pressure greenback

• NZD/USD firmed on Friday as  weaker-than-expected U.S. June employment data triggered broad-based U.S. dollar selling and reinforced expectations that the Federal Reserve may be nearing the end of its tightening cycle.

•U.S. job growth slowed sharply in June and payroll gains for the prior two months were revised lower, according to data released on Thursday, pointing to a cooling labour market.

•The unemployment rate dropped to 4.2% last month from 4.3% in May as workers left the labour force, pushing the participation rate to the lowest level in more than five years.

• The disappointing payrolls data pushed U.S. Treasury yields lower and narrowed U.S.-German yield spreads, reducing the dollar's yield advantage.

• The Reserve Bank of New Zealand is widely expected to raise interest rates next Wednesday. It has climbed 0.7% versus the Aussie this week.

•Markets are 78% priced for a rise in the 2.25% cash rate after the RBNZ signalled an increase in coming meetings, although economists are more split, with some calling for a hold given lower oil prices have eased inflation risks..

•  Immediate resistance is located at 0.5727(38.2%fib), any close above will push the pair towards 0.5734 (SMA 20).

•  Support is seen at 0.5664(July 2nd low) and break below could take the pair towards 0.5594(23.6%fib).

 Recommendation: Good to buy around 0.5710 with stop loss of 0.5660 and target price of 0.5780