NZD/USD: Looks to multiple catalysts to stay firmer above 0.7200 on the NFP day

• NZD/USD bulls catch a breather around the weekly top.
• Pre-NFP trading lull probes the latest risk-on mood.
• China trade figures, RBNZ Inflation Expectations may offer intermediate moves ahead of the key US data.

NZD/USD seesaws around 0.7230-35, near the week’s high, amid the initial Asian session on Friday. In doing so, the kiwi pair pauses the two-day uptrend with a smaller pullback from the latest peak of 0.7240. While the pre-NFP caution may have stopped the bulls, underlying strength in the market sentiment seems to favor the quote ahead of data from China and New Zealand that precedes the crucial US jobs report.

Nothing matters more than the NFP…

Beijing’s rejection of diplomatic trade dialogue with Australia and the sustained US investment limits on China joined Dallas Fed President Robert Kaplan’s comments favoring tapering to tame the bulls. However, upbeat early signals of the US employment report and American support to the move eyeing waiver of IP protections for the coronavirus (COVID-19) vaccines favored the market sentiment.

While the aforementioned catalysts helped all three key US equity benchmarks to close in the green for the first time in a week, S&P 500 Futures struggle for a clear direction by the press time. It’s worth mentioning that the US dollar index (DXY) took the biggest hit in two weeks and favored commodities, as well as Antipodeans, the previous day.

The reason behind indecisive market behavior could be traced to the cautious sentiment ahead of the US Nonfarm Payrolls (NFP) for April, expected 978K versus 916K prior. Also probing the NZD/USD bulls are China’s trade numbers and RBNZ Inflation expectations for Q2.

Ahead of the key inflation signal for New Zealand, the Australia and New Zealand Banking Group (ANZ) said, “The preliminary results from the ANZ NZ Business Outlook survey for May showed a further lift in pricing intentions from already record levels. Inflation expectations lifted from 2.0% to 2.2%. Expected costs rose another 4 points with a net 80% of firms expecting to encounter higher costs and a net 58% of respondents intend to raise their prices.”

Read: US April Nonfarm Payrolls Preview: Leading indicators point to another strong NFP

Technical analysis

Only if the NZD/USD prices close below 0.7175-70 support confluence, comprising 100-day and 21-day SMA, traders should dump the hopes of witnessing the 0.7300 as a quote.