AUD/NZD bears running out of momentum into key Aussie jobs data

AUD/NZD is currently trading at 1.0548 and firming off the overnight lows from a surge in the risk-on correlated kiwi. 

AUD/NZD dropped some 40 pips on Wall Street but gave most of the gains back into the final stages of the session. 

News that the Pfizer/ BioNTech vaccine was heading for emergency approval in the US and EU lifted markets.  

However, the day ended up being more of a consolidative day for financial markets, as investors weighed the rising cases of US covid cases and deaths with the prospects of a vaccine being distributed sooner in 2021 than first anticipated. 

Markets, therefore, are caught in a crosscurrent of vaccine optimism and near-term economic weakness which leaves the rally in the kiwi vulnerable. 

''The “big picture” remains messy,'' analysts at ANZ bank said.

''The near term outlook for the virus and countries ravaged by it is dire, but equally, there is light at the end of the tunnel. Timing is everything.''

The analysts argue, however, that countries like NZ that have the diseases under control are in a better position to bridge that gap.

''With the surging housing market scaring off expectations of a negative OCR, the path of least resistance for the NZD is higher.''

Jobs data on the cards

 Still, for today, the focus will be on the Aussie. 

Australian labour market data are the main event.

'With Victoria under lockdown during October and payroll data pointing to a broader slowdown in the national recovery, Westpac is looking for employment to fall -30k, close to consensus.

''If the participation rate eases to 64.74%, then our employment forecast would see the unemployment rate rise from 6.9% to 7.2% (median forecast 7.1%),'' the analysts said. 

Meanwhile, in the background,  iron ore hit 2-month highs, helped by super-hot Chinese steel demand which could be beneficial to the currency. 

AUD/NZD technical analysis

Meanwhile, the pair has been successfully moving towards a -272% Fibonacci of the bullish correction's highs and lows at 1.0515.