AUD/NZD: Developing bearish momentum

Yesterday the dollar received additional support from the publication of data on the number of applications for unemployment in the US. The weekly report of the Ministry of Labor turned out to be very positive, showing a decrease in the number of initial applications for unemployment benefits (for the week of May 6-12) from 264.0 thousand to 242.0 thousand, and secondary - from 1.807 million to 1.799 million (economists expected a decrease to 254 thousand and growth to 1.818 million, respectively).

Yesterday, the Australian Bureau of Statistics also presented its report on the national labor market. And here the data turned out to be disappointing for the national currency of Australia. According to the data presented, part-time employment in the country recovered by 22.8 thousand after falling by 19.2 thousand in March, but full-time employment decreased by 27.1 thousand in April. At the same time, the unemployment rate in Australia increased by 0 in April, 2%, up 3.7% a month earlier. Against this background, the share of the economically active population also corrected negatively (66.7% instead of 66.8% a month earlier).

After the publication of data from the national market, the Australian dollar fell both against the US dollar and in cross pairs. In particular, against the New Zealand dollar, in the AUD/NZD pair.

Weak Australian labor statistics may weaken the mood of the country's Central Bank leadership regarding further tightening of monetary policy.

Other macro data released earlier in the week, which turned out to be weak, the decline in commodity prices, in particular oil and gas prices, and gold prices also had a negative impact on the Australian dollar quotes.

As for the aforementioned AUD/NZD pair, it continues to actively decline, including against the backdrop of a relatively better state of the New Zealand economy. As New Zealand's finance minister said yesterday when presenting the country's budget, "the Treasury no longer predicts that the country will go into recession," also expecting New Zealand GDP growth in 2023-2024 by +1.0% (against the December semi-annual forecast of -0, 3%) and reducing unemployment to 5.0% (previous forecast was 5.5%).

From a technical point of view, AUD/NZD is testing the 1.0600 support level, declining in a descending channel on the daily chart towards last year's low near 1.0480. A more separate target is the local multi-year support level of 1.0300. The pair is trading in a sustained bear market, favoring short positions.

Support levels: 1.0600, 1.0560, 1.0500, 1.0480, 1.0400, 1.0300.

Resistance levels: 1.0636, 1.0672, 1.0700, 1.0725, 1.0740, 1.0775, 1.0800, 1.0830, 1.0900, 1.0925.