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New Zealand Unemployment Rate August 3 2021

What does the data mean to the market?

The Unemployment Rate released by Statistics New Zealand is the number of unemployed workers divided by the total civilian labour force. If the rate is up, it indicates a lack of expansion within the New Zealand labour market. As a result, a rise leads to weaken the New Zealand economy. A decrease in the figure is seen as positive (or bullish) for the NZD, while an increase is seen as negative (or bearish).

There are two main data lines from this report Unemployment Rate and Employment Change; both must deviate in the same direction to take a trade.


Historic deviations and their outcome

May 4 2021 A -0.2 Deviation from Unemployment created a wonderful move unopposed by the Employment Change number. NZD pairs strengthened for a good 5 mins!

Check out the price action here:

February 2 2021 A positive deviation of -0.7 from the headline Unemployment Rate with a complementary positive deviation of +1.4k on the secondary line Employment Change gave a slow move. This is what I love to see.

I saw some movement before the delivery of the news, which is always a concern and often a sign that the news is out early, but I held my nerve this time, and it paid off.

Overall the price action was excellent.

Check out the price action here:




I will use forecasts of:

Employment Change (Q/Q) 0.7
Employment Change (Y/Y) 1.2
Unemployment Rate 4.4



Today's trade plan

If I get either a positive or negative deviation of 0.2 from the headline Unemployment Rate without a conflict from the secondary line of Employment Change, then I would expect a good initial move followed by some continuation after the initial spike.

NZ is poised to raise their rates in August, or could this data push that back to October? It's a key report and one I have been looking forward to for some time.




Tradable pairs

AUDNZD
EURNZD
GBPNZD
NZDUSD


Hope this helps but please do your own analysis!!

Good luck!!

James Thatcher

Trading foreign exchange on margin carries a high level of risk, and may not be suitable for all investors. Past performance is not indicative of future results. The high degree of leverage can work against you as well as for you. Before deciding to invest in foreign exchange you should carefully consider your investment objectives, level of experience, and risk appetite. The possibility exists that you could sustain a loss of some or all of your initial investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with foreign exchange trading, and seek advice from an independent financial advisor if you have any doubts.
 

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I was excited about this trade, and rightly so. We saw a 0.4 deviation from the forecast on the Unemployment rate with a supporting deviation from Employment Change of 0.2. Price action was great, with loads of opportunity to enter on the retraces. Overall it continued well and over a long period. I cashed out after about 15 minutes, but the price continued further into the night.
A great trade and some profits banked.

See Chart here: https://calendar.galaxysoftwareinc.com/#/chart;i=60486;t=2021-8-3 22:45:00.0;s=EURNZD;r=S1

See the video at :

 
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