NZD/USD drops to fresh weekly lows near 0.5850 ahead of US jobs report

• US Dollar Index extends rally on Friday, rises above 100.50.
• RBNZ Governor Orr says monetary stimulus could be increased if needed.
• Nonfarm Payrolls in US is expected to decline by 100K in March.

After spending the Asian session moving sideways near the 0.5900 handle, the NZD/USD pair came under renewed selling pressure and slumped to a fresh weekly low of 0.5843 on Friday. As of writing, the pair was trading at 0.5852, erasing 1.08% on a daily basis.

In an interview with NZ Herald on Friday, Reserve Bank of New Zealand (RBNZ) Governor Adrian Orr reiterated that the central bank could increase the monetary stimulus if needed to make it difficult for the kiwi to find demand. Meanwhile, the Caixin Services PMI data from China improved to 43 in March from 26.5 but failed to provide a boost to the China-proxy NZD.

USD stays strong ahead of NFP

Meanwhile, ahead of the critical labour market data from the US, the US Dollar Index (DXY) is posting gains for the third straight day to keep the bearish pressure on the pair intact. At the moment, the DXY is up 0.53% on the day at 100.65.

Previewing the Nonfarm Payrolls (NFP) data, “the March data will probably still be recession-like, though, with net job growth held down by reduced hiring and payback for mild-weather-exaggerated strength," said TD Securities analysts. "We forecast -200k.”

US NFP Preview: 6 Major Banks expectations for March payrolls report.

Technical levels to watch for