NZD/USD faces pressure ahead of Q2 employment data release

NZD/USD is trading cautiously near 0.5950 as markets await New Zealand's Q2 employment report, which is expected to show further labor market weakness. Economists forecast unemployment to rise to 4.7% from 4.3% in Q1, marking the sixth consecutive quarterly increase. Annual wage inflation is projected to moderate to 3.4% from 4.5%, potentially reaching levels consistent with the RBNZ's inflation target. The data release could significantly impact the Reserve Bank of New Zealand's monetary policy stance, with markets already pricing in potential rate cuts later this year. Technical indicators show NZD/USD testing support at 0.5940, with resistance at 0.5980. A weaker-than-expected employment report could push the pair toward 0.5900, while any positive surprises might provide temporary relief. Traders should monitor the kiwi's reaction closely, as deteriorating labor conditions could accelerate RBNZ easing expectations and weigh on NZD crosses.