NZD/USD consolidates near 3-month highs on stronger NZ jobs, weaker USD

• Solid New Zealand jobs data, renewed USD weakness keep NZD underpinned.
• Focus on the US mid-term elections outcome and RBNZ rate decision for next direction.

The NZD bulls are seen regaining poise, driving the NZD/USD back to the test the midpoint of the 0.67 handle, as the US dollar is turning back lower across its major peers.

The renewed US dollar weakness is mainly driven by improved chances of the Democrats taking the majority of the House, as the Republicans falter again. NBC calculates that there is a 90% chance that Democrats take control of the House. Should the Republicans lose the House and the Senate, the greenback will see heavy sell-off, suggesting markets dump the Trump’s policies. 

The sentiment around the spot remains underpinned by stellar New Zealand’s Q3 jobs report while markets shrugged-off falling inflation expectations. The NZ unemployment rate arrived at 3.9% vs. expected 4.4%.

Focus now remain on the outcome of the US Congressional elections and the RBNZ monetary policy decision due tomorrow for fresh trading impetus,

NZD/USD Technical Levels

Resistance: 0.6766 (3-month high), 0.6800 (round number), 0.6822 (Aug 2018 high).

Support: 0.6700 (key support), 0.6646 (Nov 6 low), 0.6600 (round number).