*CORRECT* NZD/USD has surged on a..............>

KIWI: *CORRECT* NZD/USD has surged on a particularly upbeat labour mkt report

for Q2 out of New Zealand. Headline unemployment rate fell to 3.9% from 4.2% vs.

exp. of 4.3%. Likewise, considerable beats were noted in employment change, both

on a Q/Q and Y/Y basis, while participation rate held steady, in line with

forecasts. Wage data also provided positive surprises.

- The rate last deals 48 pips higher, at $0.6576 after topping out at $0.6587.

The sharp rally allowed it to more than erase its earlier losses, highlighted in

the previous bullet.

- Bulls look for a break above the psychological $0.6600 level, which coincides

with the 61.8% retracement of the $0.6482-$0.6791 move. Above opens the 50-DMA

at $0.6627. Conversely, a pullback through the May 27 & 28 highs of $0.6559

would please bears, prompting them to set their sights on the lower 1.0% 10-DMA

envelope, which kicks in at $0.6534.

- The release hasn't changed implied probability of a 25bps rate cut from the

RBNZ at tomorrow's MonPol meeting. Such a scenario remains fully priced in.