AUD/NZD refreshes yearly low near 1.0500 on upbeat NZ Q2 job numbers

AUD/NZD remains on the back foot, taking offers around 1.0500 amid Wednesday’s initial Asian session. Although the Reserve Bank of Australia’s (RBA) hawkish tilt tried to save the bears the previous day, New Zealand’s (NZ) strong employment figures for the second quarter (Q2) weighed on the quote of late.

NZ Employment Change crossed 0.7% market consensus and 0.6% prior to 1.0% whereas the Unemployment Rate dropped to 4.0% versus 4.5% forecast and 4.7% previous readouts.

Read: NZ jobs data beats expectatons, NZD/USD marginally higher

Other than New Zealand data that amplifies concerns over the Reserve Bank of New Zealand’s (RBNZ) rate hike in 2021, Auckland’s victory to control the pandemic despite resurgence around the globe also exerts downside pressure on the quote. Furthermore, the RBNZ’s moves to curb property prices and hawkish outlook weigh on the AUD/NZD prices as well.

Meanwhile, the market’s indecision over US stimulus and recent geopolitical jitters concerning Iran and China challenge the pair’s moves. On the same line is the cautious mood ahead of the key US data/events as well as mixed covid updates from Australia, the UK and the US.

Amid these plays, Wall Street marked notable gains but the S&P 500 Futures drop 0.10% by the press time.

Looking forward, AUD/NZD bears may wait for Australia’s June Retail Sales and China’s Caixin Services PMI for July for fresh impulse. Should these data join the recently downbeat risk appetite, AUD/NZD may pause the downtrend for now. Additionally,  ADP Employment Change  for July, an early signal for Friday’s US Nonfarm Payrolls (NFP), as well as ISM Services PMI will be the key to follow.

Technical analysis

A three-week-old descending trend line around 1.0495 challenges AUD/NZD bears targeting the December 2020 low of 1.0412. On the contrary, recovery moves are capped by weekly resistance line and 21-DMA, respectively around 1.0580 and 1.0600.