The US-dollar started losing steam again last week. The Nonfarm payrolls figure came out very disappointing with only 57,000 newly created jobs. That was way below the expectation of 114,000 and might hence prevent the Federal Reserve to increase rates. Since the Bank pointed out that they will leave the low- interest rate regime behind some market observers called for potential rate hikes. The Central Bank stated that they will focus on fighting inflation.

The disappointing jobs data might now prove otherwise. Rate increases might cause further jobs being lost and hence the Central Bank might not act accordingly. 

This trading week might hence continue to cause the Greenback losing momentum. Wednesday’s appearance of Kevin Warsh at a panel at the ECB Forum might be observed closely to get further insights into the dollar. Despite a rather light data week the focus should also be on the rate decision from New Zealand. As a change is expected the Kiwi might react volatile thereafter. Furthermore, Canada’s unemployment report might also shed further light into the Loonie. The CAD has been under pressure lately.

Important events this week:

– NZ- interest rate decision– It is expected that the Royal Bank of New Zealand will adjust their interest rate this week. The last rate cut had been implemented in November last year. However, since prices had been rising recently a rate hike might now follow. Meanwhile the NZD mostly remains in a sideways pattern, not moving much against the USD. Yet, if a rate hike will be implemented, this could support the Kiwi moving forward. 

NZDUSD weekly chart

During the last trading week, the NZDUSD currency pair had started to gear up new strength. A rate hike is generally positive for a currency but since the event is being priced in the positive momentum might remain limited. Since the pair bounced off the important support zone of 0.5650 the upside might now continue. Above 0.5720 the positive momentum might even gear up fresh steam. The market might then test the technical resistance level of 0.5830. That level also marks the 50- moving average and might hence act as new resistance. The rate decision will be held on Wednesday, the 08^th of July at 04:00 CET.

– CA- Employment Change – Canada’s unemployment has been fluctuating between 6.5% and 6.8%. The data is expected to remain flat at the current 6.6% level whereas the recent employment data has been mostly negative apart from the last positive surprise. However, the CAD remains under pressure against most other currencies. The Loonie broke out to the downside against the EUR two months ago and also the renewed strength of the Greenback caused a burden against the Canadian dollar.

EURCAD monthly chart

The EURCAD chart above shows that the uptrend has resumed momentum again in May this year. A potential break of the technical resistance zone of 1.6350 might ignite fresh upside. Typically, after a break of an important zone the pace starts to gear up steam. Depending on the outcome of the unemployment report the upside might continue. While a better reading might strengthen the CAD initially this could offer buying opportunities at lower prices. A disappointing figure on the flipside might straight push the FX pair higher. Traders should hence focus on the unemployment report, which will be reported on Friday, the 10^th of July at 14:30 CET.