The currency pair is looking to end a three-week losing streak, with early trading today seeing the pair slightly lower at $0.5890/95, a narrow range below $0.59 due to softer US equity futures. Despite this minor setback, the pair has been extending gains for the third day in a row, nearing a two-week high above 0.5900.

The recent surge has been driven by a selling bias in USD and upbeat equity markets. A comfortable breach of the 20-Day EMA ($0.5875) has set bullish traders’ targets at the November 2 high ($0.5917) and $0.60 handle, while bears are targeting the 20-Day EMA and $0.58 handle.

Market participants are eagerly awaiting the Non-Farm Payrolls (NFP) report, which is expected to significantly influence the Federal Reserve’s rate decision and hence, the dynamics of USD. Lower US Treasury bond yields, reflecting the market’s rate hike expectations, along with a private-sector survey indicating expansion in China’s business activity, are supporting antipodean currencies such as NZD.

However, concerns over China’s economic slowdown and weak domestic employment figures hinting at an unchanged policy rate by the Reserve Bank of New Zealand (RBNZ) are limiting the rise of NZD/USD.

In political news, the NZ Nationals have lost two seats in the final election result, necessitating support from two parties for government formation. Market watchers will be keeping an eye on important data releases next week, which include Q4 Inflation Expectations, October Manufacturing PMI, and Card Spending data.

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