NZD/USD Price Forecast: Kiwi Dollar outperforms ahead of US NFP data

• NZD/USD advances to near 0.5870 as the New Zealand Dollar outperforms its peers.
• Investors await key US NFP data for August.
• The Fed is expected to cut interest rates in the policy meeting this month.

The NZD/USD pair trades 0.45% higher around 0.5870 during the European trading hours on Friday. The Kiwi pair strengthens as the New Zealand Dollar (NZD) outperforms its peers amid risk-on market mood.

S&P 500 futures trade higher during the European trading session, demonstrating an increase in the risk appetite of investors.

Meanwhile, the US Dollar (USD) faces selling pressure ahead of the United States (US) Nonfarm Payrolls (NFP) data for August, which will be published at 12:30 GMT. Investors will pay close attention to the US official labor market data as it will influence market expectations for the Federal Reserve's (Fed) monetary policy outlook.

The US NFP report for August is expected to show that employers hired 75K fresh workers, almost in line with the prior reading of 73K. The Unemployment Rate is seen accelerating to 4.3% from the former release of 4.2%.

According to the CME FedWatch tool, the Fed is widely anticipated to cut interest rates in the policy meeting this month.

NZD/USD continues to face selling pressure near the 20-day Exponential Moving Average (EMA), which trades around 0.5887.

The 14-day Relative Strength Index (RSI) slides to near 40.00. A fresh bearish momentum would emerge if the RSI breaks below that level.

Going forward, a downside move by the pair below the August 2 low of 0.5800 will expose it to the April 11 low of 0.5730, followed by the round-level support of 0.5700.

In an alternate scenario, the Kiwi pair would rise towards the June 19 high of 0.6040 and the September 11 low of 0.6100 if it manages to return above the psychological level of 0.6000.

NZD/USD daily chart